China video game market overview
China’s video game industry is one of the major markets for the global industry, where more than half a billion people play video games. According to Statista market research, revenue in the Video Games segment is projected to reach US$27,817m in 2020. It is expected to show an annual growth rate (CAGR 2020-2025) of 1.8%, resulting in a projected market volume of US$30,444m by 2025.
Because of its market size, China has been described as the “Games Industry Capital of the World” and is home to some of the largest video game companies like Tencent and Netease.
Despite its size, the video game market in China appears to be only at the beginning of its development. New offerings like Ubisoft’s Uplay + gaming flat fee or technical innovations like Google Stadia’s game streaming platform could attract even more casual gamers and revolutionize how consumers play video games in general.
The market’s largest segment in China is mobile games
Mobile games in China grew rapidly over the next several years, growing from about 10% of the Chinese video game market in 2012 to more than 50% by 2018, reaching a market volume of US$21,251m in 2020.
The number of mobile players has increased over the past five years, while the number of PC client gamers started to decrease.
While already being by far the biggest video games segment, the mobile games market still bears a huge growth potential for the coming years.
Wizards Unite and Nintendo’s growing support for Mobile Games are essential driving forces for the segment’s future development. Also, mobile versions of the popular online games Fortnite and PUBG have a huge impact on the market’s growth.
China’s government policies about video games
As with other parts of its media, the Chinese government has strong oversight of the video game industry.
Regulations on video game content
All games released there must go through a government approval process to affirm that the content is appropriate for the nation’s values.
- The content in video games is supervised by SART / NRTA. Publishers are required to obtain a China game license from SART prior to publication, which may be denied if the game contains elements deemed inappropriate.
- The process of submitting games for a license and putting them up for sale later is overseen by MOC.
- The State General Administration for Press and Publishing and the Anti-Pornography and Illegal Publishing Offices also played a role in showing the games.
Regulations on video game addiction
China was one of the first countries to recognize the potential for video game addiction. In 2015, the Chinese government found it necessary to reduce the time young people spend playing video games.
China has tried to tackle video game addiction by its young people bypassing regulations to be implemented by video game publishers aimed at limiting consecutive playtime, especially for children.
- A new law passed in November 2019 restricts minors under 18 to less than 90 minutes of video gameplay on weekdays and three hours on weekends, with no video games allowed from 10 pm until 8 am. These are set by requiring game publishers to enforce these limits based on user logins.
- Additionally, the law limits how much each player can spend on microtransactions, which range from around $ 28 to $ 57 per month depending on the player’s age.
- In September 2020, the government implemented its own name-based authentication system to be made available to all companies to enforce these laws.
Rules regarding Foreign investors in the video game industry in China
Cooperation with Chinese entities is inevitable for foreign investors entering China’s gaming market
With the growing success of video games, many foreign companies have sought to invest full or partial ownership of Chinese companies to acquire a portion of the growing market.
The Chinese government, worried that these foreign companies would affect the way Chinese companies run their video games, passed a law banning any foreign company from investing or having any kind of property in a Chinese company.
This allows foreign companies to bring games to China only through operational agreements and partnerships with wholly-owned Chinese companies.
- For example, Blizzard Entertainment’s World of Warcraft is operated by NetEase.
- While the Japanese gaming company Nintendo distributes its games through a partnership with Tencent.
- Another example is the game distributed by Tencent, PlayerUnknown’s Battlegrounds, an online multiplayer battle royale game developed by the South Korean PUBG Corporation. In 2019, Tencent chose to modify the game, calling it “Game for Peace”, because the game’s approval was not granted. The problem was due to Chinese regulations calling for the removal of games that showed too much blood.
Foreign servers to avoid cooperation with Chinese entities
Foreign developers could avoid cooperation with Chinese entities by using foreign servers, for example via overseas versions of the popular Steam gaming platform.
However, as most Chinese players use domestic platforms and app stores, such as the Chinese Apple Store or Tencent’s App Store, they will not be able to easily find or purchase a game hosted on a foreign server.
Chinese users also may not be able to use foreign payment methods on foreign platforms, as they do not have international credit cards, but use digital payment systems such as Alipay and WeChat Pay.
Despite the hurdles to enter China’s gaming market, it remains a top destination for foreign game developers due to its enormous size.
Covid-19 has increased the use of video games in China
Since people had to stay at home, during the Covid-19 pandemic, many Chinese chose to play video games to fill their time.
The growth rate increased from January to March in 2020 compared to the same period last year, triggering the market consumption.
For example, the game Honor of Kings had over 60 million streams on the streaming platform Douyu, compared to just over 30 million the year before.
- Tencent experienced a decline in the use of services like WeChat Pay, but its gaming services grew.
- French video game developer Ubisoft said that it noted an “increase in playtime” during the lockdown, expressing optimism in the further growth of the market.
How can brands promote their video games in China?
The China video game market is a highly competitive market with the presence of both small and big players, which constantly push the market to evolve toward product innovation and services innovation.
However, to be successful in the China market, the brand reputation is essential. You should be present in the online Chinese world, to make your brand as recognizable as possible while communicating with your target audience and uploading content on social media.
Social media marketing, KOL (Key Opinion Leaders) cooperation, Baidu website, PR, and presence on Q&A platforms are the tools to use to reach Chinese consumers. However, you should manage them in the right way, localizing your content to the Chinese culture.
Social media marketing to increase brand awareness in China
Communication has evolved over time and today not having a conscious presence on Chinese social media automatically means not existing and being cut off from the world.
Chinese people interact with brands through social media. Therefore, having a strong presence on social networks and being able to adequately tell the story of your brand is the key to creating empathy and loyalty.
The most used social media to promote video games in China are:
1-WeChat is the main Chinese social network. Born as a messaging platform, over the years it has introduced several innovative and advanced features that have made it more than a simple online chat. WeChat is incredibly popular to engage and attract Chinese.
It allows brands a complete CRM:
- Interact with followers and keep them updated on-brand news,
- Mini-programs, small apps inside the WeChat system that cover various functions, such as e-commerce, games, and much more,
- Wechat pay, mobile payment service,
- Wechat advertising.
2-Weibo will be perfect for your visibility as well and give a chance to the consumer to know who you are. It allows you to spread content to hundreds of millions of people.
It allows brands to:
- Communicate to the masses, as it is a one-to-many platform,
- Increase their brand awareness,
- Convert users into customers,
- Collaborate with KOL to increase audience ratings,
- Weibo advertising.
3-Bilibili is a Chinese video-sharing website themed around animation, comic, and games (ACG), where users can submit, view, and add overlaid commentary on videos.
Bilibili provides a live streaming service where the audience can interact with streamers. Usually, the topic is anime, content creation, game strategy, and so on. In addition to videos, Bilibili also offers games, mainly ACG-themed mobile games, such as the Chinese version of Fate / Grand Order.
This platform offers brands the opportunity to promote video games and create positive word of mouth which is important in China to let people know you.
Baidu Chinese website as window for your credibility
Baidu is the leading Chinese search engine. Baidu offers similar products and services to Google, but unlike this, Baidu controls most of the search market in China (70%).
If you are one of the best game makers, you should be able to create a very professional website with fast loading speed. To rank high and have loading speed on Baidu, your website should conform to Chinese standards: hosted in China, licensed for ICP, and in Mandarin.
For further information to ensure that your site is present on the front page of Baidu contact GMA.
GMA helps you to enter the China video game market successfully
Gentlemen Marketing Agency is a Digital Marketing Agency that is expert in helping foreign companies to establish or strengthen their position in China. We are a growing team of 75 marketers with a passion for China and digital marketing.