Government restrictions have taken a toll on the country’s huge games market.
China’s enormous video games market is projected to decline this year, the first decline in 20 years as the Chinese government takes a harder line toward the games industry.
Leading analysis firm Niko Partners specializes in the Asia market and it projects 2022 mainland Chinese video game software and services revenue will be $45.44 billion. This is a decline of 2.5 percent year on year, the first fall in market revenue in the 20 years that Niko has been tracking the China video games market.
Niko Partners highlighted lower spending on mobile games for the decline. While this was partially offset by growth across PC and console games, it wasn’t enough, as mobile games account for roughly 66 percent of total games revenue in China. The mobile games sector has declined 5.1 percent YoY in 2022, according to the firm.
NEW: China's video game market revenue is projected to decline this year.
— Daniel Ahmad (@ZhugeEX) October 31, 2022
2022 domestic video games revenue across all platforms is projected to total $45.44 billion, down 2.5% YoY.
This is the first decline since we started trackinghttps://t.co/sUtZ373kPL pic.twitter.com/pXnMHrjNdX
A combination of factors has affected the shrinking in China’s games market. These include general economic trends, with a slowdown in growth across China’s economy, which is the world’s second-largest, but there are other pressures at play that are coming from the top.
Government restrictions and a lack of new licenses have also fed the decline. New regulations that restricted the playing time of Chinese minors (those aged under 18) to just three hours a week are having a significant effect, and have reduced the number of gamers.
“China will have 701.8 million gamers across all platforms by end of 2022 marking the second year of decline, based on Niko estimates that 39 million youth gamers have stopped playing,” Niko Partners senior analyst Daniel Ahmad wrote on Twitter. “New youth gamer regulations introduced in September 2021 are the reason behind the decline”.
However, it’s not all doom and gloom. Niko expects the China market to grow over the longer term, predicting that by 2026 games revenue will have grown to be worth just over $53 billion and that the number of gamers in China by then will be 754.5 million. Now that’s a lot of gamers!
