Despite its history of strict regulation against the industry, China’s gaming market is flourishing. Chinese MMOs and RPGs are topping lists around the globe while high-quality cross-platform releases, along with creative marketing through films, eSport competitions, and livestreaming, have set the tone for China’s growing gaming market for years to come at home. In the “good ol’ days” of the early 2000s, China’s some 30 million gamers would take up their gaming interests in dark, seedy, and oftentimes illegal internet cafes. While many of these are still easy to find in metropolitan areas, the advent and subsequent spread of modern, high-powered smartphones and personal laptops have enabled China’s gamers to play both at home and on-the-go. As a result, China’s gaming industry has been in the midst of a quantum boom. Due to the lingering impact of previous governmental regulations that targeted console sales like the Nintendo, Playstation, and Xbox, China’s modern gaming market is dominated by PC and mobile offerings. While a short-term boon to game developers, these policies ultimately benefited the industry over the long-term as PCs and mobile devices generally became more affordable, accessible, and pervasive than gaming consoles for the average citizen. Moreover, developers have adapted to local market needs with dual releases of fuller, more immersive games with advanced controls on PCs for enthusiasts while publishing ‘lite’ versions on mobile devices for casual users. Through the combination of quality, affordability, and accessibility that modern cross-platform gaming provides, gaming studios and gaming aficionados alike have seen the market grow steadily to new heights. The Killer Storyline Behind China’s Gaming Industry While the craze over Japan and America’s console and arcade based games took off as early as the 1980’s, China showed up relatively late to the party. Consoles were then subject to high import tariffs from Japan and retail prices were beyond the means of most consumers. Then, in 2000, the Chinese government enacted strict laws that outright banned gaming console sales due to fears of the potential detrimental physical and mental effects that gaming could have on children. By the time the law had been repealed in 2015, Chinese gaming preferences had been largely cemented while the industry had developed around the unique needs of the local market. Chinese gamers had adapted to the early rent-for-play model advertised by internet cafes at which a user could simply pay for time at a desktop and access any game installed on the computer, thereby removing the need to pay for expensive home console setups and game purchases. So, although versions of modern consoles like the Nintendo Switch, PS4, Xbox One are now widely available for purchase in the Mainland, Chinese gamers have largely shied away from console-based gaming. Among China’s , the vast majority are mobile users. Mobile gaming has grown quickly to capture of the entire gaming market, particularly due to the convenient and affordable nature of mobile gaming. By offering either free or generally inexpensive in-game purchases on a mobile device that most users already own, game developers have largely removed the question of consumer accessibility as a barrier to adoption. 620 million gamers 68.5% Although mobile devices are restricted by a smaller screen and often lack the advanced controls that PC or game consoles offer, most Chinese developers of their games on app stores that are well adapted to mobile use and cater to a more diverse market, which opens up new opportunities for monetization. release ‘lite’ versions While widespread smartphone adoption has provided significant market opportunities for game studios, the industry has also found other ways to grow. Competitive eSports have increased in popularity in China as live-streaming and player endorsements have become more prevalent. Massively Multiplayer Online (MMO) titles like , , , and others have particularly taken off, with Chinese teams in alone banking around US$69 million in prize money since the game’s release. League of Legends World of Warcraft Dota 2 Dota 2 While MMO’s have given rise to a whole world of eSports and gaming competitions, developers have also begun partnering with the film industry to diversify revenue streams and increase their game’s popularity. A modern example is the movie, which – despite being considered a flop – still grossed US$433 million internationally and raked in $220 million alone . Whether through film, eSports, or mobile gaming, China’s gaming market has diversified its consumption model and blossomed as a result. Warcraft from China in 2016 The Games That Are All the Rage As the market grows and gamers find their niche, MMOs, RPGs, and MMORPGs have stood out as the clear winners in China. Through rich gameplay, expansive storylines, and ‘buy-in’ options, these three genres have taken the industry by storm. For instance, typically offer two routes for gamers: free play or pay-to-play. MMORPGs Free play requires a larger time commitment by the user to level up and become stronger by manually completing arduous tasks, while pay-to-play offers the ability to purchase upgrades throughout the game and allows players to level up in less time. Both types of gamer segments can be monetized by the game studio, with free players typically bringing in ad revenue over a longer period while pay-to-play purchases instantly line the pockets of the developers. , , and are three such games that have embraced these trends and are pushing the Chinese industry forward. Genshin Impact Honor of Kings Overwatch Source: Genshin Impact Genshin Impact is one of the largest recent RPG releases from China. Launched in September 2020, it has appealed to international audiences, particularly across Japan and the United States, bringing in in revenue in just its first week as the world’s second top-grossing mobile game. While it offers a console version for the PS4 (with upcoming PS5 and Nintendo Switch releases), it has mainly relied on PC and a ‘lite’ mobile version to grow its primary user base. Genshin Impact US$60 million The storyline involves a pair of twins separated by God. As one of the twins, the main player is dropped into the kingdom of Teyvat and joins a knight order. Throughout the game, the player is faced with side quests that complement the main quest to eventually find their sibling. The engaging storyline, paired with immersive gameplay, a beautiful landscape, and small but optional in-game purchases has made it a widely popular game. Genshin Impact has been compared to Nintendo’s , though the game’s additional success can be attributed to its of the Nintendo hit release. Furthermore, its multiplatform gameplay and affordability across mobile, PC, and the PS4 has opened it to a wider audience than , which was solely released for the Nintendo Switch. Genshin Impact Breath of the Wild adaptation and fine-tuning of many aspects Breath of the Wild Source: RealGear Honor of Kings While takes a more leisurely approach to its gameplay, attracts those hungry for battle. This Tencent-owned game reigns king (pun intended) in the international market, currently taking the top spot over , and boasts . It has drawn revenues of US$240 million, with 90% of its revenues coming from Mainland China. In-game purchases and additional is expected to further expand the game’s market penetration and reach. Genshin Impact Honor of Kings Genshin Impact 100 million daily active players game-related material is a mobile Multiplayer Online Battle Arena (MOBA, a subgenre of MMO) game that resembles similar mechanics to and . The game focuses on quickly developing a ‘hero’ through skill and item builds in a team-based competitive setting and battling against the opposing team within a contained arena. Before the battle begins, gamers can draft teams of heroes from different ‘classes’ that offer different skills and synergies. Once the game has begun, heroes battle against environmental challenges like minions and towers (player vs. environment, PvE), though the primary challenge comes fighting against the opposing team (player vs. player, PvP). Due to the team-based nature of the game, friends can play within their social groups, which offers a level of engagement not commonly found in RPGs. Honor of Kings Dota League of Legends The mobile platform has rendered it wildly popular. Tencent, who also owns , plans to further appeal to this mobile MOBA market by creating a mobile version which will foster a healthy competition between and . Honor of Kings League of Legends League of Legends League of Legends Honor of Kings Source: PC Games Overwatch Mobile may be king, but PC games still hold their own. , a PC-based MMO, has sold over in China, a market that alone contributes 20% to the game’s following. This online multiplayer shooter is unique for its wide variety of character classes. 32 heroes all differ in their individual skills and abilities, which contributes to a rich team dynamic and adds an element of macro-strategy from before the game has begun. Overwatch 10 million copies is incredibly popular in China – particularly within the eSport community. Competitive eSport events are estimated to generate millions of dollars worth of revenue and consistently attract hordes of gamers, game developers, and exhibitors. In 2020, has boasted a record-breaking 1.39 million in China. Overwatch The Overwatch League viewers The Secret to Beating the Game [Market] The Chinese gaming market relies on distributing high quality, low-cost cross-platform games to a diverse audience. By adapting PC and console games to the needs of the largest mobile-enabled market on the planet, Chinese game studios have been successful in crossing market segments through dual releases of fuller, more immersive games on PCs for enthusiasts while publishing ‘lite’ versions on mobile devices for casual users. In 2019, the Chinese market alone for 30% of the international gaming market. Further projections show China’s gaming industry growing at a between 2020 and 2025, though this figure could be accelerated. Future growth for this growing industry will come from gaming agencies’ continued emphasis on cross-platform releases as well as their ability to diversify revenue streams and marketing channels through films, eSport competitions, and live streaming channels. In the meantime, current MMO, RPG, and MMORPG titles like , , and will continue driving growth within China’s ascending industry. accounted 14% CAGR Genshin Impact Honor of Kings Overwatch This article was co-sponsored by the video game podcast: EXPCast .

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