China's Unstoppable Rise in the Global Mobile Gaming Market
China continues to assert its dominance in the global mobile gaming industry as it captures an astonishing 31.7% share of worldwide mobile games revenue, all generated within its borders. This information comes from the latest research conducted by video games market research firm Niko Partners. The growth is attributed to increasing investments by Chinese game companies and a projected surge in the number of gamers in the country.
In the coming years, China is expected to reach $57 billion in gaming revenues, encompassing mobile, PC, and console games. Chinese game companies currently account for 47% of mobile gaming revenues and 39% of PC revenues worldwide. This growth is driven by the companies' expanding international presence, with Chinese-owned firms experiencing a 22% increase in overseas PC game revenue in 2022 alone. The sector is anticipated to grow at a compound annual growth rate (CAGR) of 13.8% through 2027, surpassing even the domestic growth rate.
Despite a declining population, China is estimated to amass an incredible 730 million gamers. The revenue distribution among gaming platforms sees mobile games taking the lion's share at 66%, followed by PC games at 31%, and console games at a mere 3%. Tencent and NetEase, two of the country's leading gaming companies, dominated the domestic market in 2022, securing a combined 61% of PC and mobile games revenue. However, their market share diminished compared to 2021 due to underperforming titles and a lack of new game launches, suggesting that other competitors are catching up.
Both Tencent and NetEase reported positive earnings in the first quarter of 2023, with Tencent's domestic game revenue witnessing a 10.9% year-on-year growth, while NetEase's total games revenue increased by 7.6% year-on-year. A key driving factor behind this growth is the increased spending of active gaming and esports content viewers, as 42.8% of them make in-game purchases monthly. In contrast, only 2.2% of gamers who do not watch esports or gaming content make similar purchases. Furthermore, gamers who engage in live streaming tend to spend, on average, 70% more per month than non-streaming gamers.
In conclusion, China's grip on the global mobile gaming industry remains unshaken, fueled by its immense domestic market and rapidly expanding international presence. The country's gaming giants, Tencent and NetEase, continue to enjoy massive revenues, despite increasing competition within the industry. With a growing number of gamers and increased spending on in-game purchases and live streaming, China is poised to maintain its leading position in the global gaming market for the foreseeable future.