China's Video Game Market Experiences First Slump In 18 Years With 10.3% Decrease

Zinger Key Points
  • The world's largest video gaming market recorded a total revenue of US$40.1 billion in 2022.
  • A government agency linked the plummet in sales to COVID-19.

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 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 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

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