China’s video game market experienced a year-over-year drop of 10.3% — the first decline since 2003.
While in 2021 the world’s largest video gaming market recorded a total revenue of more than US$44.23 billion, but 2022’s number decreased to US$40.1 billion, per the South China Morning Post.
Moreover, the study revealed that the number of gamers in China saw a reduction of 0.33% between 2021 and 2022, down to 664 million players.
See Also: China GDP Decoded: Better-Than-Feared Q4 Caps Sluggish 2022 Amid COVID-19 Headwinds
“The whole industry is under pressure,” declared the Gaming Publishing Committee of the China Audio-Video and Digital Publishing Association on WeChat.
The government agency associates this industry shock with COVID-19 restrictions, limited production and R&D activities, difficulty in hiring new talent, a lack of investor confidence, decreased spending by consumers, and intense competition from overseas markets.
Furthermore, the drop in revenue may also be linked to China’s strict policy on game licenses: in 2022, the country licensed 200 fewer games than in 2021.
In addition, mobile game sales have also reduced by 14.4% (to US$28.61 billion) and the esports industry dropped 14% (down to US$21.42 billion).
It is also worth noting that Tencent Holdings (OTC:TCEHY), the world’s largest gaming company by revenue and the firm behind huge titles like “League of Legends,” and “Valorant,” saw a 4% decrease in gaming revenue during the third quarter.
NetEase (NASDAQ:NTES), its competitor, reported a slowdown in gaming revenue growth, with an increase of 9.1% compared to the 15% growth seen in the same period of the previous year.
See Also: Xi Jinping’s Government Gearing Up To Buy ‘Golden Shares’ In Local Units Of Alibaba, Tencent – FT
Photo by Yan Ke on Unsplash
