Video game market in China

The video game industry in mainland China currently is one of the major markets for the global industry, where more than half a billion people play video games. Because of its market size, China has been described as the “Games Industry Capital of the World” and is home to some of the largest video game companies.

  • Revenues from China make up around 25% of nearly US$100 billion video game industry as of 2018, and since 2015 has exceeded the contribution to the global market from the United States.
  • In 2019, mobile and PC games generated revenues in excess of $33 billion. These came from 685 million gamers, of which 637 million play games on mobile.
  • By 2024, it is expected that there will be 772 million players in China.

The current health crisis has led 95 % of people to play more games. In fact, with hundreds of millions of people in China stuck inside their homes amid lockdown measures to combat the coronavirus, video games reached unprecedented levels of popularity in recent months.

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. In 2024 video game market is expected to generate $46 billions in China.

Major players in the Chinese market

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.

Major players are :

  1. Tencent Holdings Limited
  2. NetEase, Inc.
  3. 37 Interactive Entertainment
  4. Beijing Kunlun Technology Co. Ltd.
  5. Perfect World Games

Users of video game in China

In the year 2019 a share of 36.6% of users is 25-34 years old. If this is the target market, a company should focus on this community, adapting its video game to this market needs and interests. This is what has done the Chinese platform Bilibili, creating a community for Chinese gamers to share their gaming experience.

The market’s largest segment is Mobile Games

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.

Why video game market is a big opportunity for foreign companies?

Due to its big market share in China, the gaming industry in China offers many opportunities for businesses. Recently, more and more international companies have started entering the Chinese market. Often this is done by either by acquiring shares in Chinese gaming companies or by sponsoring teams of professional players.

Chinese video game market trends

Female gaming industry

One of the major opportunities is the female gaming industry. Chinese female players have spent around $7 billion on games in 2018 which represents an increase of 13.8% compared to the previous year. Furthermore, the amount of female players is estimated to be almost 50% of Chinese gamers. Due to these reasons companies need to take them into consideration.

Sponsor gaming teams or event to gain visibility

Another opportunity for foreign companies is to gain visibility by sponsoring professional gaming teams or events. Popular eSport gamers are seen as China Key Opinion Leaders (KOLs). Sometimes, these KOLs are paid to organize gaming events in which they compete with other KOLs, while being watched by thousands of people around the world. The revenue generated from advertisement during competitive events is predicted to increase to more than $1 billion by 2021.

The image below represents the International, an annual esports world championship tournament for the video game Dota 2 which also takes place in china.

Cooperation between FMCG/fast food restaurant chains and videogames

The cross-border promotion with FMCG (Fast-moving consumer goods) and fast food restaurant chains has become another trend in the recent years. For example, the cooperation between Pringles and CrossFire, Tencent’s video game.

Consumers can get the item code of CrossFire by purchasing Pringles potato chips. The packaging for the potato chips has turned into a promotion channel for the mobile game. Both CrossFire and Pringles can reach a larger group of users through such non-traditional cooperation.

Video and Live Streaming Platforms

The young generation born after the 80s and 90s spend large chunks of their time on video and live streaming platforms every day. Some popular names of such platforms include Douyu , Youku and Bilibili. All three of these platforms can be very important for Chinese mobile games.

To conclude, the gaming industry in China is full of opportunities for foreign companies. However companies need to be mindful of the new regulations.

How to enter in the Chinese video game market?

Licensing a Video Game in China

An online game to become available to the Chinese market, regulators must approve the game’s content and issues a license. Games that are deemed to have inappropriate content, such as too much violence or sexual innuendo, will be denied a license.

Licensing has gotten more selective since falling under the jurisdiction of the Central Propaganda Department. On 2019 regulators approved just 131 games per month, compared to the 641 per month games of 2018. In addition only a few part of this were from foreign publishers.

Listed on Chinese app stores

Starting July 2020, all online games will require an International Standard Book Number (ISBN) in order to be listed on Chinese app stores.

The ISBN application in China involves several government bureaucracies, including the Ministry of Industry and Information Technology (MIIT), the Copyright Protection Center of China (CPCC), and the SARFT, among others.

New rules

  • In 2018, the Ministry of Education released policy plans to introduce age restrictions and playing time limits for video games, suggesting that video game addiction caused myopia and poor health.
  • In 2019, the General Administration of Press and Publication (GAPP) issued rules requiring real-name registration for online gaming. Further, the measures limit users from eight to 16 years old to adding RMB 200 per month into their accounts, and RMB 400 for users between 16 and 18 years old.

Cooperation with Chinese entities

Cooperation with Chinese entities is an unavoidable reality for foreign investors entering China’s online gaming market in a formal capacity.

In china foreign servers are generally only accessible through the use of VPNs, which the majority of Chinese users do not use. Because most Chinese gamers use domestic platforms and app stores, like the Chinese Apple Store or Tencent’s app store, they will not be able to easily find or purchase a game hosted on a foreign server.

In addition, Chinese users may not be able to use foreign payment methods on foreign platforms, as digital payment systems like Alipay and WeChat Pay are commonly used in China instead of international credit cards.

Therefore foreign developers need to find a Chinese partner to register and publish their games, also because foreign-invested enterprises (FIEs) are prohibited from directly publishing games and acquiring ISBNs.

For example, the Japanese gaming company Nintendo distributes its games through a partnership with the Chinese tech and gaming giant Tencent.

Despite the hurdles to enter China’s gaming market, it remains a top destination for foreign game developers due to its enormous size.

China’s app stores

Even with the popularity of IOS, Android is still the most popular mobile operating system across China. However, due to Chinas regulation laws, Google play is inaccessible, therefore, there is a multitude of alternative app stores to download from. Currently, there are over 200 app stores in China, with the top ones being tencent Myapp, 360 mobile assistants, Baidu mobile assistant, MIUI app store and Huawei app store.

How to market your video game in the Chinese market?

Mobile gaming has been very successful in recent years, making China an attractive market not only for game lovers, but also for brands that want to enter the Chinese market and market their video game.

Here there are successful steps to follow to market your video game in China :

Localization: You should adapt your content to Chinese video games players

There is a huge range of elements and themes that can make a mobile gaming app successful. In China Games with a more localized theme tend to do much better than games with a Western theme as they are more relatable to Chinese players. Visuals, characters, soundtrack and story are all ways in which you can achieve this.

Quality Chinese content is the key, it’s important to understand the consumer and what gamers expect. They are very discerning in China and love technical news about the game’s development and the opportunity to collaborate in its development with open source gaming/trial versions etc.

How to gain visibility ?

SEO on Baidu

The Chinese search online on Baidu for gaming information is important to gain visibility in the natural search results. This can also be combined with PPC advertising and banners to reinforce your visibility and reputation.

The basis of SEO in China starts on the Baidu search engine with a domain name en.cn. For optimal efficiency of your strategy, hosting your site in China will allow you to gain more visibility for your Video game website.

More and more people are using their mobile devices to access websites, this phenomenon means that mobile SEO also is important.

KOLs

Mobile games can also take advantage of the booming KOL (Key Opinion Leader) phenomenon in China to expand the fan base. China’s mobile game publishers can cooperate with gaming KOLs on Weibo and Wechat or do live streaming on video game platforms. Especially in video game market, these KOLs have a huge and precise fan base which can be transformed into high traffic for your brand.

Promote your game on WeChat

WeChat is the largest social network in China, therefore it is important for the branding and reputation of your game, you need to be on WeChat to be visible. Users will search and expect to see an active official account that posts content/updates for users.

Wechat is useful for brands to promote and launch new product and service as it is considered in China as a vector of communication.

Weibo

Weibo is the most open social network in China, users can see posts from anyone, this helps your content and game go viral.

Live streaming and Video game platforms

Due to the success of live streaming in China these platforms could be a big opportunity for your brand. Some popular names include Douyu , Youku and Bilibili.

Douyu

DouYu is a Chinese video live streaming service. The site is the largest of its kind in China with 163.6 million monthly active users in 2019.

Youku

Youku Tudou (优酷) is a video hosting service based in Beijing, China. It operates as a subsidiary of Alibaba Group Holding Limited.

On March 12 2012, Youku reached an agreement to merger with Tudou in a stock-for-stock transaction, the new entity being named Youku Tudou. It has more than 500 million monthly active users, with 800 million daily video views.

Bilibili

Bilibili (哔哩哔哩) is a Chinese video sharing website based in Shanghai, themed around animation, comic, and game, where users can submit, view and add commentary subtitles on videos.

Bilibili has developed several unique features that enable it to distinguish itself from other platforms. The site allows its viewers to send real-time comments that run across the screen while the video is playing, which significantly increases the sense of engagement. Bilibili creates a community for Chinese gamers to share their gaming experience.

To manage these three video game platforms could be a big opportunity for brands to gain attention from chinese consumers and to improve your brand awareness.

Gaming Forums

Gaming communities turn to very active forums such as Baidu Tieba, Tianya or Douban. These platforms can be used to talk about relevant and current topics and to promote your game.

Do you want to know more about How to market your video game in China? Contact GMA a digital marketing agency, specialized in Chinese digital market.

Read also :