China’s video game market is expected to grow despite government restrictions

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A five-year forecast from Niko Partners predicts that the Chinese video game market will grow until 2026. This forecast is based on two separate reports: one focused on mobile gaming and the other on PC gaming

The number of gamers in China in 2021 was 706 million, which is actually a year-on-year decline. But the total is expected to rise to 730 million by 2026. A big factor in slower-than-normal growth is game time regulation China implemented in 2021† The limits on legal playtime eventually pushed many youth gamers out of the market entirely. China also put a temporary stop to game licensing around the same time, but started licensing it again in April of this year

It is not the first time that China has stopped permits and then started issuing them again. The Chinese government withdrew the same maneuver in 2018 and 2019, but remained silent as to why.

Regardless of why, the newly established licenses allow the licensees to start earning revenue, which is a positive sign for the industry as a whole.

Niko Partners’ reports also predict an increase in average revenue per user. In 2021, the ARPU was $64.44. This is expected to rise to $75.60 per user in the coming years. With how big mobile games are in China, it’s easy to speculate about that kind of growth. Less time to play can easily mean more money spent on progression.

“Over the past year we’ve seen gamers enjoy nostalgic and new games during the pandemic lockdowns, we’ve seen youth gamers say goodbye to a primary pastime due to regulations limiting their gaming hours, and we’ve seen innovations such as esports hotels and the metaverse arises,” says Niko Partners chairman Lisa Hanson. “We fully expect that China’s metaverse will develop differently compared to the rest of the world due to China’s unique regulations. Game companies have started investing in internal projects and are collaborating with local governments with more than 16,000 metaverse-related trademarks that have been The biggest near-term opportunity for metaverse in China will come from interoperability between gaming ecosystems and collaborative events with brands and IP holders.”

The more than 16,000 metaverse related trademarks is a huge number. China is well on its way to developing its own take on the concept. Hopefully the rest of us can figure out what the metaverse actually is. Otherwise we may be left behind.

Metaverse aside, figures from Newzoo place more than half of the world’s gamers in the Asia-Pacific region. A healthy, growing industry in China can only be good for the industry as a whole. Fingers crossed the country holds out another license freeze and even tougher restrictions on gamers.

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Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

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