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China’s gaming market decreases 19.1% quarter-on-quarter

The Chinese market is valued at $8.2 billion
China’s gaming market decreases 19.1% quarter-on-quarter
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A new report by Chinese video gaming intelligence firm CNG has delved into the Chinese gaming industry’s performance over the third quarter of 2022, indicating a period of decline for one of the world’s largest gaming markets.

The Chinese market is now valued at $8.2 billion, down 19.1 percent from $10.2 billion in the second quarter. Sales are also down quarter-on-quarter, declining 12.6 percent to $9.3 billion from last quarter’s $10.5 billion, reports the South China Morning Post.

Significantly the combined revenue for the first half of 2022 fell 1.8 percent year-on-year, marking the first decline since 2008, while the number of games at the end of June was 665.69 million compared to 666.57 million in December 2021, a decreaseof almost a million players.

The mobile industry is cited as a particular reason for this decline, having plunged to their lowest point since the start of the pandemic. Sales are down 25 percent year-on-year to $5.7 billion dollars.

“Compared with the same period last year, the numbers of active users and hours dropped significantly and spending power has weakened,” said CNG in its report.

Is the industry in trouble?

Several factors are cited in the downturn of the Chinese market. Chief among these factors are the new regulations as to how mich time and money young gamers can spend playing games. Although the summer holidays are often the peak time for time spent in-game, young gamers are legally restricted to just an hour of playtime between eight and nine PM on Fridays, Saturdays, Sundays, and statutory holidays. As a result, young gamers were limited to just 21 hours of in-game time during the summer holidays.

Another key factor in the decline is the temporary momoratum imposed on games licenses, which lasted eight months and ended in April this year. Although licenses were granted following this they came at a significantly slower pace, with 254 licenses granted between April and September. It wasn’t until September that the country’s largest games companies, Tencent and NetEase, were granted licences. The CNG states that that the games released in 2022 have failed to match the popularity of last year’s releases.

The shuttering of mobile games has also increased 89 percent since 2022’s second quarter, with one out of ten cancelled titles coming from Tencent. Despite this, the world’s largest gaming company remains a dominant force in China’s gaming landscape, thanks in part to the continued success of Honor of Kings and Peacekeeper Elite, the localised version of PUBG Mobile.

Earlier this year, we named Tencent and NetEase as two of the biggest mobile game makers of 2022.