Lilith Games talks China’s comeback, market maturity and one year of AFK Journey

• Head of strategy and investment Vincent Ou suggests changes in the Chinese market are overall positive.
• Creative director of AFK Journey Red Hao talks the nuances of a successful sequel.

As Chinese games studios continue to recalibrate after years in an unsettled market, the sector begins to look brighter for many developers.

From a near nine-month licence freeze during the pandemic, to a gradual thawing of new approvals, to the best post-pandemic year yet in 2024, the country’s games industry seems to be moving back in the right direction.

It hasn’t always looked that way - Chinese legislators toyed with banning mechanics like daily login bonuses and loot boxes in 2023 - but with a new wave of potential from generative AI, and the rise of mini games, the market appears to be mending.

For more insights from on the ground in China, we speak with two members of Lilith Games’ team: head of strategy and investment Vincent Ou and creative director of AFK Journey Red Hao.

The outlook is largely positive, but we do learn about challenges in China like market maturity, development efficiency and player discernment, as well as a sense of "deglobalisation".

A fragmentation between regions is making localisation more important and a unified content strategy less tenable.

The conversation extends to the performance of Lilith’s recent games, including AFK Journey and Farlight 84.

Chinese comeback

"Overall, the changes in the Chinese market have been quite positive," says Ou, who suggests 2025 has been a "solid" year for Lilith thus far.

"On the demand side, the rise of Black Myth: Wukong has brought in a wave of new PC players, and for the first time, Chinese has become the most-used language on Steam. That shift shows there is strong momentum behind premium, high-quality games among Chinese players.

"On the supply side, more studios are starting to explore single-player content, and we are optimistic that we will see even more standout titles coming from domestic developers in the near future. In addition, the industry is now seeing stronger policy support, and overall confidence in the market has made a solid recovery."

However, competition is "fiercer than ever" when trying to stand out against other new titles and the long-standing top games still dominating audience attention. Ou believes the industry has "clearly" entered a more mature phase, and notes players themselves are "more experienced and discerning".

"With every year, expectations for new titles continue to rise. This environment pushes developers to be more thoughtful and efficient when building new projects," he suggests.

"A lot of the same challenges from 2024 are still present, but they have become more defined and concrete. In many ways, that has helped us think more clearly and prepare more effectively."

Ou explains that Lilith Games is confronting these challenges by leaning into deep localisation, designing games with regions in mind from the beginning rather than "one-size-fits-all games". Today, its in-game experiences are intended to be more culturally aligned with local player habits and preferences.

"Our strategy is to focus on ideas that have a clear, compelling core and to identify specific niches where we can avoid direct head-to-head competition," says Ou.

"While user attention is more fragmented than before, we now have more tested and proven creative ideas that can capture interest. And although competition among top developers has intensified, we have gained stronger design frameworks and more mature production pipelines."

Production at Lilith is advancing with AI and other emerging tech, supporting teams to build content more efficiently. Overall, Ou believes the team’s ability to adapt and respond to change has continued to improve.

Modern times, modern challenges

Lilith Games has become a mainstay in the conversation around Chinese games through hits like Rise of Kingdoms, Call of Dragons and billion-dollar maker AFK Arena.

In 2024, the studio launched the long-awaited sequel to AFK Arena, and that sequel went on to be a top five mobile game in player spending among new releases last year.

Titled AFK Journey, the idle gacha game released in the West on March 27th and in China on August 8th, 2024. According to AppMagic estimates, it has generated almost $250 million in player spending between Google Play and the App Store.

"AFK Journey’s overall performance since its launch in China has been in line with our expectations, though of course different aspects of the project have played out a bit differently," says Hao, reflecting on the game’s first year in the country.

"One of the biggest advantages we saw during AFK Journey’s launch was the strong support and enthusiasm from AFK Arena’s players. Whether it was social media discussions, community content or in-game activity, the presence of AFK Arena players gave the game a solid foundation from day one."

He suggests that, compared to starting a new IP from scratch, the pre-established community certainly helped AFK Journey.

But it wasn’t all smooth sailing; navigating a sequel has come with its own challenges, such as balancing familiarity and freshness - building a sense of continuity without being too repetitive for returning players.

"We had to ensure that AFK Journey offered a fresh experience that went beyond what the original provided," Hao explains.

He compares the two games’ launches in a broader industry context, suggesting the level of polish required was lower with AFK Arena back in 2018.

At the time, there were more untapped opportunities, there weren’t gacha giants like HoYoverse’s Genshin Impact as competition, and players had lower expectations in terms of visual quality, content freshness and gameplay depth.

"The bar has been raised significantly," Hao says.

"AFK Journey is a much more ambitious title. It introduces full 3D visuals, deeper strategic systems and a complete RPG experience. That makes it a more content-heavy and hardcore game than its predecessor, which means the user acquisition funnel is narrower by design.

"So while the growth curve looks different, it reflects both the evolution of the industry and the direction we intentionally took with this sequel."

At the same time, Hao does want to see AFK Journey reach a more casual audience in the future.

"We set out to evolve the traditional gacha formula. With systems like seasonal content, an open-world RPG structure and MMO-inspired features, we have been able to maintain a stable DAU and revenue trend just by continuously delivering new content and gameplay experiences."

"An important step forward"

After 1.5 years in the West and one year in Asia, AFK Journey is in "a stable place" across markets. The game is more story-driven than AFK Arena, marks Lilith’s first 3D content-heavy title, and is in line with what the team hoped when it set out to make the game.

Reception to recent anniversary events indicated strong signals of "moving in the right direction".

Ou calls AFK Journey a "highlight" for Lilith in 2025, noting increasingly positive feedback from players. The team is looking to keep momentum going and to drive towards "a J-curve trajectory" in the long term.

But Lilith Games isn’t relying solely on one title: the studio recently relaunched Farlight 84 in China, revamped with 60-player battle royales, a first-person shooter mode, new characters and an overhaul to core gameplay mechanics. It marks Lilith's first large-scale 3D game and has scored five million users already.

Ou calls this "an important step forward in terms of genre expansion" and suggests this is another title set to be supported and evolved long-term.

"At the same time, we have several new projects currently in development. A few of them are already in testing with promising data," he teases.

"We are also getting ready to launch a brand-new RPG built on an original IP, with plans for an overseas public beta later this year."

From new IPs to sequels, from recent releases to more projects on the way, Lilith Games’ willingness to push forward with new titles indeed indicates a returning stability to China’s games industry.

As the bar rises, technology advances, and as Chinese companies showcase adaptability and endurance, their presence becomes increasingly recognised on the global stage.

We recently interviewed Japanese studio Cygames about localising Umamusume: Pretty Derby for a Western audience.