Thanksgiving is around the corner, I believe it’s a right time to refresh how’s the game industry doing in the first half of 2017. This time, I want to focus on the China market as it’s one of the most important markets for game developers no matter where you come from. GPC published the latest China Gaming Industry Report recently (1). It releases statistics in China game market from January to June 2017 and conveys a lot of valuable information. I am going to share some data here and provide some advice regarding the moves to take in China market.
Revenue of China Game Market in USD (Billions)
User Base of China Game Market (Millions)
By June 2017, the user base of China game market reached 507 million, increased 3.6% compared to last year. Among these 507 million players, 136 million of them are PC game players and 247 million are browser game players. These two sectors each decreased 1.4% and 11.4% respectively compared to last year. Mobile game user base stays robust and increased 7.5%, reached 435 million.
Revenue of Mobile Games in USD (Billion)
User Base of Mobile Games in China (Millions)
Distribution of Game Platform in China Market
Revenue of the entire China game market, including PC games, browser games, social games, mobile games, single player games and console games, reached more than 15 billion USD, increased 26.7% compared to last year.
Revenue of Domestic Developed Online Games in USD (Billions)
Domestic developed online games generated 10.46 billion USD, increased 21.6%; on top of that, the overseas revenue increased 57.7% and reached 0.6 billion USD.
Revenue of PC Games in USD (Billions)
User Base of PC Games in China (Millions)
PC games, even the user base decreased as mentioned above, increased 13.7% on revenue and generated 4.82 billion USD.
Revenue of Browser Games in USD (Billions)
User Base of Browser Games in China (Millions)
Browser game market, like what I said in my previous article (2), has been declined and now goes towards an end. During the first half of 2017, browser game revenue decreased 15.4% compared to last year, with 1.28 billion USD. Meanwhile, the revenue of mobile game market soared to 8.46 billion USD, increased 49.8%.
I also mentioned in my previous article (3) that ESport games became one of the important revenue streams in China game market, generated 7.33 billion USD in 2016 which was 30.5% of the entire China game market. This year, the ESport revenue in China market has already reached 5.42 billion USD in the first six months, and increased 43.2% compared to same period last year. It also shares 36.1% of the entire China game market. PC ESport and mobile ESport each reached 2.76 billion and 2.66 billion USD respectively. These facts reflect a promising China ESport market with massive opportunities. One of the success stories of mobile ESport game in China is King of Glory. The online streaming of one of the ESport competitions of that game in 2017 attracted billions of audience in China.
The China game market is growing very strongly and the future remains very promising. Although browser game is sunsetting, it is just an evident that mobile games and ESports are getting more and more attention. As mobile games user base growing rapidly, it will benefit the development of mobile games in all genre and further leads to a healthier mobile game market with more balanced and diversified products in the market.
However, the competition in China became even fiercer now. Take mobile game as an example, the majority of the China market is occupied by two leading companies (3). The revenues are centralized to the two, which share almost 70%. None of the medium and small-sized companies ever reached market share of more than 5% individually (You can read more about that here). On the other hand, with more games emerging to the market, the taste of players becomes more difficult to meet. So the fact is, high quality game is the only way to go. Games without high quality graphic, story, and user experience will not be accepted by the market and players.
Nevertheless, high quality game only can get you to the playing field. In order for your new game to attract users, it is recommended to combine the game with mechanics that are suitable for the ESport aspects and develop the IP in various disciplines to bring users into the game (4). You can read more about IP development here.
Revenue of Mobile ESport in USD (Billions)
These are two important strategies to increase the chance to succeed in China market. According to 2017 China Mobile ESport Report (5), the revenue of mobile ESport in China increased 256.7% from 2016 to 2017, and will keep growing 30.2% in 2018. The potential of mobile ESports not only comes from MOBA like King of Glory, but also from more genres such as casual games and strategy games. The success of Battle of Balls and Clash Royale are both good examples of a more attractive, diversified mobile ESport market that engages players of all types. Another strategy for China game companies to survive is to go to the overseas market. Back to 2016, China game market, as the number one in the world, was standing next to a huge western game market, including US, Canada, EU countries, and all other western markets. The entire western market was larger than the China market by then, which generated around $50 billion (6). As a matter of fact, mobile games operation is relatively simpler in most of the western markets when compared to China market and the Asian market in general. I will talk more about that in my future article. At the meantime, you can read my previous article to avoid the pitfall of China game companies get into the western market (7).
You can download the original report here.
Seasun is a leading Chinese online games publisher focused on creating high quality games/game engines that push the boundaries of player experience in action entertainment. The company is also involved in small-medium sized investments for game studios worldwide. We have recently started up our U.S. studio in Redwood City, CA to create top quality content for the western market.
Seasun has shipped many successful titles, including the popular MMORPG series JX (http://jx3.xoyo.com/), the MMOARPG titles First Myth (http://fs.xoyo.com/index1) and CQ (http://cq.xoyo.com/), along with our FPS MAT (http://xd.xoyo.com/). The “JX” series has grossed more than $250 million and has achieved a daily active user count of 3.3 million. We are currently building a special team of highly talented people to create the technology for our next-generation MMOARPG at this studio.
Founded in 2015 and based in San Francisco’s East Bay, Magic Fuel Games is focusing on developing games that capture the imagination of players. With a core team of industry veterans, bringing decades of development and AAA experience from games that have captivated gamers around the world. The company's Series A was funded by Seasun Inc in February 2016 and has been growing its team and developing its 1st product since then.
Kingsoft, Seasun’s parent company, is publicly traded in the Hong Kong Stock Exchange (SEHK: 3888) with market value of 3.8 billion USD. Kingsoft has created 3 other subsidiaries alongside Seasun: Cheetah Mobile (NYSE: CMCM), WPS Office, and Kingsoft Cloud Service. Kingsoft has over 4,000 employees worldwide.