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China’s Gaming Market Is On The Decline

It sounds like the Chinese gaming market will decline in 2022, marking the first time in 20 years that the sector has experienced this type of downward trend. According to Niko Partners, the Chinese video game software and services industry will generate $45.44 billion in revenue this year, a 2.5% decline compared to 2021.

Niko Partners specifically mentioned mobile gaming when talking about this decline. The Chinese mobile gaming sector fell by 5.1% from 2021 to 2022. While this may not seem like a lot, it actually is because mobile video games make up roughly 66% of all Chinese gaming revenue.

“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,” said Niko Partners senior analyst Daniel Ahmad in a post on Twitter. “New youth gamer regulations introduced in September 2021 are the reason behind the decline”.

While the short-term outlook isn’t all that great for China, that’s not the case when it comes to long-term growth. By 2026, Niko Partners expects Chinese gaming revenues to exceed $53 billion.

The Profit‘s Take:

It’s obvious that Chinese gaming regulations have a lot to do with this downward trend. Losing 39M youth gamers would be the death knell for the gaming industry in any other country. In the context of 700M gamers total, it seems a little less dramatic. However, I don’t think ANY western companies should be going East. It’s hard to trust the numbers because there is so little transparency around them. There’s opportunity there. However, if you’re a business TODAY, it would be hard for me to recommend western gaming companies to go to China.

(All information was provided by TheGamer)

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