The Chinese video game market is experiencing a resurgence, with the player base reaching an unprecedented 668 million, according to a recent announcement by a government-backed gaming industry group. This growth signifies a recovery following a period of regulatory restrictions imposed by the government.
This impressive figure, representing roughly half of China's population, marks a significant milestone for the world's largest gaming market. The first half of the year also saw the domestic gaming market generate $20.23 billion in sales revenue.
Zhang Yijun, a director at the China Game Industry Group Committee (CGIGC), highlighted the positive trend, stating that the Chinese gaming industry is gradually recovering and demonstrating upward momentum, even as the global gaming market faces challenges. He emphasized the need to maintain industry confidence for the remainder of the year.
The rebound follows a period of decline in 2022, attributed to a government crackdown on gaming addiction concerns. These restrictions significantly impacted revenue and market value for major Chinese gaming companies like Tencent and NetEase.
While the market is recovering, revenue hasn't yet reached pre-crackdown levels. The first half of 2023 saw sales revenue of 144.263 billion yuan, down from 150.493 billion yuan in the same period of 2021.
The regulatory landscape has shifted since the crackdown, with the government resuming approvals for new games. In July, 88 games received licenses, contributing to a significant increase in approvals compared to 2022. Citi Bank analyst Alicia Yap projects that between 1,000 and 1,100 domestic games could be approved in 2023, nearly double the number approved in 2022. Yap expressed confidence in the steady approval process for the second half of the year.
Despite the increase in approvals, the actual launch rate of new games remains relatively slow. A report by Securities Daily indicated that only 23 of the 88 games approved since January have been released or have a confirmed launch date.
