The Chinese gaming market is expected to register a CAGR of 14% during the forecast period 2019 - 2024. China being a mobile-first country constituting the world's largest mobile subscriber base and owing to the rapidly rising popularity and increased adoption of mobile games and eSports in the country, the market is expected to witness growth during the forecast period.
- The rise of mini-games played inside the apps like WeChat which are played without installing another app are witnessing rapid adoption in China. These games, which tend to have strong social elements and are easy to play, and thus have attracted many followers across the country.
- The rise of mobile gaming is expected to outpace the growth of PC and console gaming in the coming few years. Moreover, games in the cloud are also witnessing a huge demand owing to the factors like faster internet speeds and the emergence of 5G networks. Few players in the market have already showcased their cloud gaming services in the past few months, Such as Google's Stadia, Tencent's Start, Microsoft's xCloud launched to test the market.
- With many international companies entering the Chinese gaming market, either by acquiring shares in Chinese gaming vendors or through sponsoring the teams of professional players, the market is expected to further grow in the coming years.
- One of the important drivers of the growth of the computer gaming industry in China is the rising popularity of eSports. eSports is a competitive part of the gaming industry, where many players participate in gaming competitions while the game is broadcasted online.
- Moreover, owing to the increasing internet penetration rate in rural areas and the availability of affordable mobile phones by Chinese manufacturers, it is expected that the number of mobile gamers will further increase during the forecast period.
- The Chinese gaming industry suffered from a nine-month freeze on the gaming licenses in 2018 which significantly decreased the launch of new titles. The government motivation behind this action was to control the content of video games. Strict government regulations are expected to restrain market growth in the future.
Scope of the Report
Gaming refers to the act of playing electronic games, through multiple channels such as gaming consoles, personal computers, mobile phones or through another medium.
Key Market Trends
Mobile Gaming Occupies the Largest Market Share
- Owing to the increasing availability of affordably priced smartphones providing high-performance output, primarily from home-based brands like Oppo, Xiaomi, and Vivo, there is a high growth potential for China's mobile gaming market.
- One of the major factors driving the gaming market is that the major publishers of games have established the mechanics that the PC and console games can be successfully modified to mobile screens, owing to which many popular games have been transferred to the mobile platform.
- For instance, Chinese giant Tencent Holdings, one of the world's largest gaming company, mostly present in the mobile gaming domain throughout the years with research and development has upgraded its WeChat app to become one of their most popular gaming platform in China. Currently the company has a portfolio of around 147 mobile games. One of their most popular mobile games is "Honour of Kings" which has over 200 million players in China.
- Owing to the simplicity and accessibility they present, mobile games are being adopted and being played by gamers of every age in the country.
Rise of Cloud Gaming and 5G to Drive the Market
- With the ongoing huge private sector investment, strong government support, and availability of young talent are the primary factors behind the growth of China's cloud computing industry.
- Chinese technological giant Tencent has already begun testing its own cloud gaming platform and has selected a group of users to sign up and test the platform, this is the company's strategic move to get ahead of its competitors in the next big trend of the gaming industry.
- Cloud gaming platform allows users to stream their favorite games rather than having to download them on smartphones or gaming consoles or buy physical copies. Instead, the game runs on the cloud.
- By using the cloud platform, High-end AAA-rated games can be played even on lower-end machines. The limitation previously caused by memory requirements, graphic requirements and processing power decreases with cloud solutions and provides the user with exceptional gaming experience.
- Qualcomm Technologies on June 2019 announced a joint demonstration with ZTE of the 5G-powered cloud gaming on a live 5G network. The demonstration utilizes the cloud gaming solutions from Tencent instant play on 5G smartphones and aims to demonstrate that console-quality mobile gaming experiences are achievable over live 5G networks. With the increasing number of 5G connections in the country the market is expected to witness further growth.
The Chinese gaming industry is highly competitive owing to the presence of many small and large players in the market. The market appears to be moderately concentrated with the major players in the market adopting strategies like product innovation, service innovation, mergers and acquisitions to stay ahead of the competition and increase their reach.
- April 2019 - Tencent launched a website for a product called "Start" and is allowing people in Shanghai and the Southern China province of Guangdong to sign up for the test. The description on the website, written in Mandarin, translates as "you can play on any device."
- March 2019 - Intel & Tencent partnered for a new game streaming service called 'Tencent Instant Play'.It works similar to already announced services such as Microsoft's Xcloud and Google's Project Stream.
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