China’s video game market is bouncing back with an impressive surge in the number of players. According to a government-run game association, the country now boasts a record-breaking 668 million gamers, which is about half of the total population. This robust growth comes after a challenging period, during which the gaming industry faced a crackdown by authorities due to concerns over addiction.
The China Game Industry Festival was held in Shanghai, where the China Game Industry Association (CGIGC) announced the latest figures. Along with the record-breaking number of players, CGIGC also revealed that sales revenue in the domestic gaming market reached 144.263 billion yuan (HK$158 billion) for the first half of this year. This underscores the resilience of the gaming industry, as it steadily emerges from the slump caused by the government crackdown.
Zhang Yijun, a director at CGIGC, expressed optimism about the future of the gaming industry in China. He stated, Against the backdrop of a sluggish global gaming market, China’s gaming industry is gradually emerging from a trough and showing an upward trend. However, he also acknowledged the challenges that lie ahead and emphasized the need to bolster industry confidence.
Last year, China experienced a decline in its gamer population for the first time, resulting from the stringent government crackdown on the industry. This crackdown had a significant impact on revenues and market value for many domestic gaming giants, including Tencent Holdings and NetEase. While the gaming sector has shown signs of recovery, sales revenue has not yet returned to pre-crackdown levels. Sales figures for the first half of 2022 fell from 150.493 billion yuan to 144.263 billion yuan.
In response to concerns surrounding excessive gaming, Chinese authorities suspended the approval of new games for nearly eight months between 2021 and 2022. However, regulations have since been relaxed, and regulators recently approved 88 games for release in July. Analyst Alicia Yap from Citi Bank predicts a steady increase in the number of game approvals, estimating that a total of 1,000-1,100 domestic games will be approved in 2023, nearly double the figure for 2022.
Despite the optimistic outlook, state-media Securities Daily reported that the rate of game launches remains sluggish. Out of the 88 games approved for release in January, only 23 have been launched or have confirmed launch dates. This suggests that there may still be challenges to overcome in fully revitalizing the gaming industry in China.
In conclusion, China’s video game market is experiencing a remarkable rebound, with a record-breaking number of gamers as the country’s gaming industry gradually recovers from a tumultuous period. While the industry still faces obstacles, the approval of new games and increasing player numbers indicate positive growth potential. As the market continues to evolve, industry players and regulators must navigate a delicate balance between fostering growth and addressing concerns about gaming addiction.
