The gaming market in China is one of the largest and fastest-growing in the world. In 2023, it was valued at approximately $45 billion, making it the largest gaming market globally, with mobile gaming accounting for a significant portion. China’s gaming industry has seen substantial growth over the past two decades, driven by a combination of technological advancements, government support, increasing internet access, and a growing middle class. It spans a wide range of formats, including mobile games, PC games, console gaming, and eSports, with millions of active gamers.

The gaming culture in China is not only about entertainment but also an integral part of the digital economy. As of 2023, there are over 700 million gamers in China, with a diverse demographic ranging from teenagers to older adults. The rise of gaming as a social activity, along with the increasing integration of social media and live streaming platforms, has also helped establish gaming as an essential form of entertainment in the country.

This report provides an in-depth look at China’s gaming market, including the driving factors, major segments, key players, challenges, and future outlook.

Key Drivers of Growth in the Gaming Market

Mobile Gaming Dominance

One of the key drivers of the gaming market in China is the dominance of mobile gaming. With over 1 billion smartphone users in the country, mobile gaming has become the preferred format for many Chinese gamers. The ease of access, low entry barriers, and the ability to play on the go have led to the rapid growth of mobile gaming, which accounted for over 60% of the total gaming revenue in China in 2023.

Popular mobile games like Honor of Kings, PUBG Mobile, and Genshin Impact have attracted millions of active players and generated significant revenue through in-app purchases. Mobile games in China were valued at $27 billion in 2023, and this segment is expected to continue growing due to the widespread adoption of smartphones and the growing availability of 5G networks.

Government Policies and Regulation

The Chinese government plays a significant role in shaping the gaming market, particularly through the regulation of content and the imposition of licensing requirements for game publishers. The National Press and Publication Administration (NPPA) is responsible for approving new games and ensuring they comply with Chinese laws and regulations, including content restrictions related to violence, gambling, and political themes.

In recent years, the government has also implemented measures to address concerns about gaming addiction among minors, including limiting the number of hours minors can play and regulating in-game purchases. These policies are aimed at promoting healthy gaming habits while ensuring that the gaming industry continues to thrive in a controlled environment.

Technological Advancements and Digital Infrastructure

The rapid development of 5G networks, cloud gaming, and augmented reality (AR) technologies has also been a major catalyst for the growth of the gaming market in China. The introduction of 5G has enabled smoother and faster mobile gaming experiences, while the rise of cloud gaming has allowed players to access high-quality games without the need for powerful gaming hardware.

Cloud gaming platforms like Tencent Cloud Gaming and Ubitus have begun offering players the ability to stream games directly from servers, eliminating the need for expensive gaming consoles or PCs. Additionally, the growing popularity of eSports and the increasing integration of live streaming have created new avenues for gaming content consumption and monetization.

Rising Disposable Income and Gaming Culture

China’s growing middle class, with increasing disposable income, is fueling the demand for high-quality gaming experiences. In 2023, China’s urban population reached over 60% of the total population, with many urban residents increasingly spending on entertainment, including gaming. As disposable income rises, the demand for both premium games and gaming hardware (such as consoles, gaming PCs, and accessories) has expanded, contributing significantly to the overall market growth.

Furthermore, gaming has become a social activity in China, with many players engaging in online multiplayer games, participating in eSports tournaments, and consuming gaming-related content on platforms like Douyin (TikTok’s Chinese version), WeChat, and Bilibili. This shift in gaming culture has made gaming a more communal and socially driven activity, further enhancing its popularity.

Market Segments in the Gaming Industry

Mobile Gaming

Mobile gaming is the largest and most lucrative segment of China’s gaming market. As of 2023, it accounted for 60% of total gaming revenue. The increasing number of smartphone users, combined with high-speed internet access, has created a thriving mobile gaming ecosystem. The segment includes a variety of games, ranging from casual and hyper-casual games to complex role-playing games (RPGs) and massively multiplayer online (MMO) games.

Popular Mobile Games

Some of the top mobile games in China include:

• Honor of Kings (王者荣耀): Developed by Tencent, this multiplayer online battle arena (MOBA) game is one of the most popular mobile games in China, with over 100 million daily active users.
• PUBG Mobile: The mobile version of the popular battle royale game has been hugely successful in China, generating billions of dollars in revenue.
• Genshin Impact: Developed by miHoYo, this action RPG has gained immense popularity globally, with China accounting for a significant portion of its revenue.

Mobile games like these leverage in-app purchases (IAPs) as their primary monetization model. Players can buy virtual goods, skins, characters, and other enhancements within the game, generating substantial revenue for developers.

PC Gaming

Although mobile gaming dominates, PC gaming remains a vital segment of China’s gaming market. The country has a long-standing tradition of competitive gaming and online multiplayer games, with a growing number of gaming cafes (also known as Internet cafes) that cater to gamers who prefer PC gaming.

Popular PC Games

China has seen a surge in the popularity of multiplayer online games (MMOs) and real-time strategy (RTS) games, which are typically played on PCs. Some of the top titles in this segment include:

• League of Legends (LOL): This MOBA game, developed by Riot Games (a subsidiary of Tencent), has a huge following in China, with professional eSports tournaments and a dedicated fan base.
• Dota 2: Developed by Valve, this multiplayer online battle game has a strong presence in China, particularly in eSports.
• World of Warcraft (WoW): This MMORPG continues to have a significant presence in China, despite the rise of mobile gaming.

The PC gaming market is particularly strong in the eSports industry, where China is a global leader in organizing and participating in competitive gaming events. In 2023, the global eSports market was valued at $1.5 billion, with China accounting for over 40% of total global eSports revenue.

Console Gaming

Console gaming remains a smaller but important segment of the Chinese gaming market. The dominance of mobile and PC gaming, combined with the high price of consoles, has kept console gaming relatively niche. However, the launch of PlayStation 5 and Xbox Series X/S in China has reignited interest in console gaming.

Sony PlayStation and Microsoft Xbox

In 2023, Sony PlayStation and Microsoft Xbox had a growing presence in China, particularly with the launch of PlayStation 5. Despite the obstacles posed by local censorship and regulatory challenges, both companies have made significant investments in the Chinese market, offering localized content and collaborating with local developers.

Although console gaming has not achieved the same level of success as mobile and PC gaming, it is expected to grow as more Chinese gamers turn to consoles for exclusive titles and high-quality gaming experiences.

eSports

eSports has rapidly grown into a major segment of the gaming market in China, and the country is widely regarded as one of the leading markets for competitive gaming. In 2023, the Chinese eSports market was valued at approximately $4.6 billion, representing a 15% share of the global eSports revenue.

Professional eSports Leagues

China is home to several prestigious professional eSports leagues, including:

• League of Legends Pro League (LPL): The LPL is one of the most successful eSports leagues in China, with millions of fans watching the games live and through streaming platforms.
• Honor of Kings Pro League (KPL): Developed by Tencent, the KPL is one of the largest mobile eSports leagues globally, with millions of players and fans.
• PUBG Mobile Pro League (PMPL): PUBG Mobile has seen great success in China, particularly in the competitive scene, with tournaments that attract large audiences.

China’s eSports scene continues to thrive, with increased investment from both local and international companies. The government’s support for the development of eSports infrastructure, including stadiums and digital broadcasting platforms, is further solidifying China’s position as the global leader in eSports.

Game Streaming and Content Creation

Game streaming and content creation have become essential components of the gaming ecosystem in China. Platforms such as Douyin (Chinese TikTok), Bilibili, Huya, and Douyin have made it easier for gamers to broadcast their gameplay and for fans to watch live streams and gaming content.

Live Streaming Platforms

• Douyin: Douyin is one of China’s most popular platforms for short-form videos and live streaming. The app allows gamers to showcase their skills, play through popular games, and engage with their audience in real-time.
• Bilibili: Originally a platform for anime and pop culture content, Bilibili has expanded into live streaming and eSports broadcasting. It is a major player in the gaming content market.
• Huya: Huya is a leading game streaming platform in China, providing users with live broadcasts of eSports tournaments, gameplay, and other gaming-related content.

Game streaming has evolved into a form of entertainment in its own right, with professional streamers and influencers making a living from advertising revenue, sponsorships, and viewer donations.

Major Players in China’s Gaming Market

Tencent

Tencent is the dominant force in the Chinese gaming market, owning a large portion of the top games and having investments in various global gaming companies. Tencent is the publisher of Honor of Kings, PUBG Mobile, and League of Legends, and it holds a stake in several major gaming companies, including Epic Games (Fortnite) and Riot Games (League of Legends).

NetEase

NetEase is another significant player in China’s gaming market. It has partnerships with global gaming giants like Blizzard Entertainment and Activision to publish games like World of Warcraft and Overwatch in China. NetEase is also a major producer of mobile games, including Identity V and Knives Out.

Sony and Microsoft

Sony and Microsoft are key international players in China’s console gaming market. Despite challenges with local censorship, both companies have continued to expand their presence through exclusive titles and partnerships with local developers. PlayStation 5 and Xbox Series X/S are gaining traction among Chinese gamers.

iQIYI

iQIYI, a Chinese streaming platform, is increasingly involved in the gaming and eSports markets. It broadcasts major eSports tournaments, including the League of Legends World Championship and Honor of Kings Pro League, helping to drive interest in competitive gaming.

Bilibili

Bilibili is a significant platform for game streaming and eSports content in China. The platform has a young and engaged user base, making it an important player in the Chinese gaming ecosystem.

Future Outlook for the Gaming Market in China

Continued Growth of Mobile Gaming

The mobile gaming segment in China is expected to continue its dominance, with 5G technology, cloud gaming, and augmented reality (AR) creating new opportunities for innovation. Mobile games are likely to remain the most popular gaming format, driven by increasing smartphone penetration and technological improvements in mobile game development.

Expansion of eSports

China’s eSports industry is poised for further growth, with the government continuing to invest in eSports infrastructure and the increasing popularity of competitive gaming. As the global eSports market continues to expand, China is likely to maintain its position as the leader in both player base and viewership.

Development of Virtual Reality (VR) and Augmented Reality (AR) Games

As VR and AR technologies become more accessible, China is expected to see an increase in the development and consumption of immersive games. These technologies, combined with 5G networks, could lead to new forms of interactive and highly engaging gaming experiences.