The Chinese Games Market Is Slowing Down
Recent reports suggest that the Chinese video games market has entered a slowdown, after a period of more than a decade of impressive growth. While it’s too early to confirm if the drop in revenue is simply a short-term hiccup, some analysts have already suggested that it could lead to the biggest operators looking abroad in the future.
The Full Details
This information has come from the state-backed China Audio-Video and Digital Publishing Association. The group revealed that the country’s video game industry saw revenue drop in the first six months of 2022, which is notable as it’s the first time in the 14 years of reporting these figures that a decline has been seen.
In fact, revenue fell by 1.8%, giving a total of 147.7 billion yuan, which is around $21.8 billion. Some of the reports point out that this comes at a time when there are regulatory issues in the sector that have frozen new titles, and may cause companies like NetEase and Tencent Holdings to look elsewhere for future growth possibilities.
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What Does the Future Hold?
The crucial factor now is whether the Chinese government eases its restrictions on the video gaming industry in time for it to recover. Issues like strict censorship have blocked the release of new games, and that’s already been reflected with the first-ever drop in the number of gamers in the country. This drop was relatively minor but could be viewed as a sign that the tide is turning after such a long period of constant growth.
China remains the biggest global gaming market, both in terms of the revenue it generates and the number of gamers there. However, the US market isn’t far behind in terms of annual revenue and any further problems in China could see the American industry leave it behind.
Only 172 new games were approved by regulators in the first half of 2022, which is a huge drop from the total of over 750 that came out in the equivalent period last year. Diablo Immortal was one of the few big games to hit the market and the free-to-play title quickly became one of the biggest hits. But a scarcity of fresh new titles is sure to have a big effect on the market’s growth.
The problems encountered by Chinese video game companies in releasing new titles have had an immediate effect on the market, and this is something that’s going to get worse the longer the freeze on new games getting approved goes on. Therefore, the second half of 2022 seems certain to be a crucial period for the industry’s future. If things get back to normal, we can expect to see the spectacular growth of the past to be resumed, but otherwise, it could be the end of the boom.