After several decades of development, Chinese cultural industries, such as online literature and video games, have created products that enrich global culture with creativity, imagination and local elements, appealing to both domestic consumers and those from overseas.
China's video game industry, after three decades of development, has evolved into a competitive player in the international market, especially in the section of mobile games, driven by the internet and technological advancements.
According to CNG, a research institute on the gaming industry, between 2019 and 2023, the global gaming market grew from $146.2 billion to $184 billion, with a four-year compound annual growth rate, or CAGR, of 5.92 percent.
Notably, the mobile gaming sector had seen significant growth, increasing from $68.7 billion in 2019 to $90.4 billion in 2023, with a four-year CAGR of 7.1 percent.
In comparison, overseas revenue from games independently developed in China had risen from $11.6 billion in 2019 to $16.4 billion in 2023, achieving a four-year CAGR of 9.04 percent.
This growth is primarily attributed to the advantages of Chinese companies in mobile game development and operations.
With the widespread adoption of smartphones and the development of mobile internet technologies, mobile games have become a major part of the global gaming market.
Leveraging their leading technology and extensive experience in this area, Chinese gaming companies have successfully launched a series of popular game products in both domestic and overseas markets.
For instance, due to the great success of Genshin Impact, Shanghai-based game developer miHoYo jumped into the list of top 100 enterprises of 2020 in the city.
In 2023, Genshin Impact became the most lucrative Chinese game in overseas markets. By the end of last year, it had garnered about $5 billion, and players from overseas contributed more than 60 percent of the total, according to data from analytics company Sensor Tower and App Magic.
Since its launch in 2020, Genshin Impact has won the best mobile game award in 2021 and the player's voice award in 2022 at the annual The Game Awards — often dubbed as the "Oscars" of the global gaming industry, while being nominated for the best ongoing award four times.
Overseas revenue
At the end of 2023, at the TGA annual gala, Black Myth: Wukong, a new game from China, captured the world's attention. Developed by Hangzhou-based Game Science, it was slated for release in August. On social media platforms, many people talked about their surprise at the release date, as the trailers looked "so fake" with "gorgeous visuals, incredible character design, nice music", and they "can't wait".
Black Myth symbolized a significant leap forward for China's gaming sector, heralding a new era where advanced technology, innovative gameplay and cultural creativity intersect to redefine gaming experiences and enrich the global game culture, despite the fact that overseas revenues of Chinese game developers have dropped in two consecutive years.
In 2023, although the global market was showing signs of recovery, increasing by 6 percent year-on-year, and the global mobile gaming market grew by nearly 2 percent from the previous year, games developed independently in China garnered nearly $16.4 billion, down 5.65 percent year-on-year. The dropping percentage was even larger than that in 2022.
Statistics from CNG show that in January, the revenue continued to reduce by 3.24 percent compared with December.
One of the reasons for the decline, according to Zhejiang Century Huatong Group, the largest shareholder of Shanda Games, one of the leading game companies in China, is that as other countries and regions pay more attention to the development of the game industry, while increasing support for local industry, they have also tightened regulations on imported products, including entry requirements, privacy protection, and payment compliance.
Besides, as the number of players in mature markets approaches saturation, the cost of acquiring users continues to increase, leading the market to concentrate on high-quality products.
Despite the continuous reduction, overseas markets are key to many Chinese game developers, as domestic regulations started tightening in 2018. For example, in 2022, a regulation was introduced, largely limiting the time for children to play video games.
According to Sensor Tower, 27 Chinese mobile games developers saw their revenue from the overseas market exceed $100 million in 2023. The top 30 Chinese game developers still maintained stable profitability in overseas markets, with total overseas revenue reaching $10.9 billion in 2023, holding steady compared with 2022 and accounting for nearly 18 percent of the total revenue of mobile games in the overseas market.
According to the latest financial report, Tencent's international gaming revenue in Q4 last year hit 13.9 billion yuan ($1.93 billion), totaling 53.2 billion yuan for the year and accounting for 30 percent of its gaming income.
Key contributors included Pubg Mobile, which saw a 27 percent month-on-month overseas revenue increase in December, according to Sensor Tower. Additionally, Honor of Kings has expanded to 57 countries and regions, ranking top 10 in several markets.
Beijing Ultrapower Software, another leading Chinese game company, gained nearly 6 billion yuan in revenue last year, up more than 24 percent. With games such as Age of Z Origins and War and Order, its overseas revenues accounted for about 90 percent of the total of game section.
