15 May 2019
IDC: China Gaming Industry Regains Growth Momentum in Q1 as Domestic Developers Intensify Overseas Push
BEIJING, May 15, 2019 —China’s gaming market reached RMB58.44 billion in the first quarter of 2019, up 8.8% from previous quarter and 5.1% from a year earlier, according to the 1Q19 China Gaming Industry Report jointly released by IDC and GPC, showing signs of recovery and regaining growth momentum thanks to the favorable policies such as the resumption of game approvals and incentives for going global.
Mobile games continued to be the dominant segment with a 64.6% market share. Client games saw a marginal growth in revenue to RMB16.61 billion, driven by new game launches and recovering to the level seen in the same period in 2018.
Meanwhile, web games, console games and standalone games saw a further squeeze in their market share. Gaming companies shifted their focus to mobile game quality and user loyalty as the demographic dividend gradually diminished. With more game titles to be launched, companies are expected to see a growth in their revenue generation capacity and market share.
In terms of the number of game users, the total swelled to 640 million in the first quarter of 2019, up 1.7% on a quarterly basis and 6.7% on a yearly basis. This increase was largely boosted by the steady expansion of mobile game users to 620 million in the first quarter. The number of client game users reversed four consecutive quarters of decline to post a 0.7% growth on a quarterly basis, though the market still needs a flurry of new launches to attract more users.
Emerging market segments saw further expansion as games targeting women and ACG games gradually matured. Compared to traditional game categories, these games have a larger incremental user base and growth potential. Despite an overall revenue growth slowdown of the gaming market in 2018, the number of game users has been steadily increasing.
In the first quarter of 2019, China’s homegrown games maintained stable revenue growth in overseas markets with total revenue topping US$3 billion. In response to policy incentives including the Belt and Road Initiative and the going global initiatives for Chinese culture, and gaming policy adjustment in 2018, Chinese gaming companies further strengthened their R&D and made proactive efforts to expand in overseas markets. Currently, Chinese gaming companies have gradually established a mature overseas strategy framework, including partnerships with overseas gaming firms to develop games that are more adapted to local users, and leveraging innovative categories such as casual games and survival games to gain users in overseas markets. Meanwhile, sophisticated operations in individual market segments also increased user loyalty. In addition to further increasing market share in mature gaming markets such as Asia, Europe and North America, Chinese gaming companies also expanded their presence in emerging markets like Russia, South America and the Middle East.
Among the homegrown games going global, role-playing, strategy and multiplayer online battle arena (MOBA) games were the main revenue generators, together accounting for 86.3% of the total overseas market revenue, including 40.4% for role-playing games, 29.9% for strategy games and 16% for MOBA games. Strategy and MOBA games were the most popular categories in overseas markets, while role-playing games were dominant in the domestic market.
“The domestic gaming industry has entered a more regulated and stable development phase, where gaming companies in the entire industry chain and ecosystem need to further strengthen cooperation and exchanges among themselves,” said Turian Tan, Market Analyst, Client System Research, IDC China. “Thanks to introduction and integration of emerging technologies, innovative gaming categories will help gaming companies explore and expand the boundaries of games, giving full play to the role games play in bringing social benefits and solving existing challenges facing the industry.”
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