In Focus: China's Game Industry I Daxue Consulting

20Jun2016

In Focus: China’s Game Industry

To know more about the China’s Game Industry, contact us at dx@daxueconsulting.com

According to a recent report, the worldwide games market is expected to reach $113 billion by 2018, rising at a CAGR of nearly 7%. In this environment, mobile games are a major driving force. Daxue reports that mobile and online PC games will account for almost 60% of the industry’s revenue by 2018. China represents a major force shifting the industry toward mobile games development.
In 2015, people around the world spent more than $36.5 billion in mobile games, almost 40% of the global game market and Chinese consumers make up a huge percentage of it ($7.1 billion). By the end of 2016, China is expected to be the largest game market in terms of revenue earned. While, it is expected that the US and China together will account for half of the entire global games market by 2018, China will surpass the US market, reaching a revenue of $27.7 billion in comparison to a revenue of $24.1 billion for the US market.

Indeed, one of the factors that influence the large revenue gap between the US market and the Chinese market is mobile gaming. This segment reached its maturity stage in the US while the Chinese market still has scope for growth. What is the structure of this high-potential market though?

In China, major industry players, such as Netease (In Chinese:网易) or Tencent (In Chinese: 微信), are dominating the industry, pushing small and medium-sized gaming companies to reinforce their expertise. Therefore, it creates a highly competitive and innovative ecosystem for the entire industry. The online games market in China presents a number of challenges for international companies that are eager to enter the market. Thus, the key challenge for international companies is to fully understand the Chinese market and to show innovation and responsiveness in a distinctive game genre that follows the rapid update of the Internet technology.