Mobile gaming is the undisputed market leader of the games industry in terms of revenue, and a big part of that is accessibility. Mobile gaming doesn’t require the purchase of a console or the most up-to-date graphics card, there are more monetisation options, and a wide variety of games available, including casual titles.
China is a unique market in a number of ways, and the largest mobile-first market in the world, but the past few years has seen a number of unique challenges in the Chinese market.
The year began in the midst of a hiatus on new game licensing first imposed in July 2021, which wasn’t lifted until April 2022. Despite this, the country’s mobile market was valued at over $9 billion in Q1, representing a 2.72 percent year-on-year increase.
Even after the hiatus was lifted, there was a noticeable slowdown in licensing compared to previous levels, with Tencent and NetEase notably not receiving any new licences until September.
Another factor in the Chinese market’s tumultuous year has been the country’s attempt to curb the rise of video game addiction among young gamers. The company imposed restrictions on playtime, limiting young gamers to just one hour a day, three days a week of playtime. Niko partners forecast that this would result in a 40 percent fall in young gamers.
How did China’s giants do?
As the world’s largest mobile gaming market, it’s understandable that China has some of the largest mobile game makers in the world, and these companies have seen significant challenges.
NetEase is one of the companies behind one of the year’s biggest mobile releases Diablo Immortal, but the game was delayed just days before its scheduled release in the country, which led to the company’s stock falling from 151.50 HKD per share to 131. The company was also among the first in line for a US audit, without which the company would be barred from the New York stock exchange.
The company also announced that it was ending its partnership with Blizzard, meaning that the majority of Blizzard titles would see their services suspended in China, including World of Warcraft and Starcraft.
Tencent, the world’s largest gaming company, lost its status as China’s largest company, signalling the sharp downturn in the company’s mobile market. The company also recorded its first quarterly loss since first listing in 2004, and laid off 5500 staff members.
Perhaps in an attempt to maintain its market position, Tencent and its subsidiary Riot Games have been at loggerheads with a number of competitors, namely NetEase and Moonton, with allegations of copyright infringement among other issues. One of these suits resulted in Tencent being ordered to pay Moonton $31 thousand, after the court found that it had defamed the company.
Another factor in China’s turbulent year has been covid, with the country imposing strict anti-covid policies which were only recently lifted. The epidemic saw an unprecedented boom in the mobile market and, while China has a long way to go before it loses its status as a market leader, further decline is possible.
