Niko Partners' latest report on the Chinese game markets forecasts that it will hit over $57 billion in revenue by 2027.
The overall gaming market in China (console, PC and mobile) amounted to $45.5 billion in 2022, despite legislative crackdowns and pandemic restrictions. And by 2027 China is expected to boast 730 million players, with the current domestic split of gaming being 66% mobile, 31% PC and 3% console games.
Another interesting aspect is the prominence of mobile esports in the Chinese market. Out of 102 tournaments in China, over half of those held (51%) were for mobile titles. Tencent’s Honor of Kings boasted a tournament with a prize-pool numbering at a whopping $14.7 million. Niko Partners also say that Valorant, Tencent’s Overwatch-Counter Strike cocktail is one to watch when it launches in China later this year.
CEO and founder of Niko Partners, Lisa Hanson was positive about the message this sent about the game market. “Chinese game companies are growing internationally, and they are making bold investments at higher rates than ever.
“PC games revenue generated overseas by Chinese owned companies rose by 22% in 2022 and is expected to grow by a 13.8% CAGR through 2027 – which is higher than the domestic growth rate by a significant margin. You must get to know Chinese developers and publishers both in the domestic market and abroad if you are serious about the global games industry.”
Smooth sailing ahead?
It’s important to remember that, despite this sunny forecast it doesn’t mean that the way is entirely clear for China’s game market in the near future. The sudden video game licensing freeze and conjunctive crackdown on tech giants and game makers has made many wary as to the risks of continued operations in the country.
Recently we’ve seen Tencent make big investments outside of China and licence its games for foreign markets, while NetEase has intensified the opening of new studios in Europe and beyond.
In April we heard from Gamebake’s Michael Hudson and Sandsoft’s Lauren Lu about how the freeze had changed perceptions of developers and game makers interested in expanding into China. “Periodic policy adjustments mean both domestic and foreign publishers need to be prepared for sudden changes and, in the past five years, ISBN licence approvals have been paused twice. Foreign game developers and publishers therefore typically work closely with a Chinese publisher to better navigate the licensing and operational challenges of the Chinese market," Lu explained.
It's clear challenges remain but the forecast indicates that China’s gaming market is not looking at slowing or contracting anytime soon.