The Chinese government continues to restrict licenses for game publishing in China. Thus, many negatives continue to plague Chinese game market trends. According to a report from JIGUANG Big Data, the penetration rate of the game industry in China (Penetration Rate = Number of Customers ÷ Target Market Size × 100) shows a steep downward trend (*).
By September 2018, the mobile game market penetration rate in China had fallen to 49.6%, a decrease of 7.6% percentage points compared to a year ago. This is the first time that the game market penetration in China has fallen below 50% this year.
Still, I’m positive about the overall future and state of the Chinese mobile game market. Read more of my market assessments here (**), In addition, I'd like to share some positive game market insights in China gleaned from the data in Newzoo's Global Games Market Report for 2018.
By the end of 2018, three billion people will be using mobile globally, of which Asia Pacific users as the majority. China contributes the largest share of the mobile user base. The global user number is expected to reach 3.8 billion by 2021, with China and India mainly contribute to the growth.
In China, there are 783 million active mobile users, making China No.1 of the list. Following China is India with less than half of the active user base of China. North America ranks No.3 in this list. The difference between China and India, though, is expected to decrease as the mobile users in India will increase from 375 million now to 601 million by 2021.
The trend is encouraging. The number of global mobile users is foreseen to reach 3.8 billion in 2021, compared to 2.5 billion in 2016. User growth leads to opportunities, especially when more and more mobile services are generating revenue for companies. The app store revenue generated by mobile games will reach 106.4 billion USD in 2021, more than doubled compared to 42.5 billion USD in 2016. Asia Pacific, again, will take the biggest share of this growth in 2021, with 68 billion USD compared to 25.8 billion USD in 2016. Other big markets such as Europe and North America will also grow steadily.
Seeing the positive trends above, I believe the global market will continue trending up even though China currently encounters with a speed bump. As the global mobile user base expanding, it is the best timing for China game developers to go overseas. Western market is the best option in terms of the market size and profitability potential. However, China games getting into the Western market is not as easy as it sounds, as you can see more details from my previous article (***). The alternatives could be Southeast Asia, Japan and Korea, since these markets share similar culture with China. Companies can also consider the India market which also has outstanding number of mobile users. The user base it has would be a new land that worth discovery even though the monetization has not caught up yet. Explorers who start early on this new land would find more opportunities to get the monetization strategy right for this market.
Comentarios