A market campaign of cosplay features the e-sport League of Legends in Hangzhou, Zhejiang province. (Photo/China Daily)
Popular e-sports have plonked China at the peak of a booming global market
China's digital gaming market has grown robustly in the past few years on the back of popular mobile games and e-sports. The uptrend is expected to continue.
According to Newzoo, a global gaming research firm, China's digital games market may have notched up sales of $22.2 billion in 2015, up 23 percent year-on-year, and surpassed the United States where sales touched $22 billion.
If the actual figures confirm the estimates, China will have become the world's largest market for mobile games.
Small wonder, the State General Administration of Sport, the national governing body of e-sports, announced in December it will hold China Mobile E-Sports Games this year.
The gaming market has never had it so good. The range now available includes Web games, mobile games, single-player games and video games.
Overall sales at 140.7 billion yuan ($21.63 billion) last year were the highest annual figure ever, up almost 23 percent year-on-year, according to a report of the China Audio-Video and Digital Publishing Association and the CNG Games Research Center.
Such stupendous revenue came from 534 million players or users of games in 2015, up 3.3 percent from 2014, the report said.
Most of them were hooked to mobile games, the key driver of sales, as more and more people started using smartphones.
Sales of mobile games alone soared 87 percent from 20 billion yuan in 2014 to 51.46 billion yuan in 2015, according to some estimates.
Analysys International, a Beijing-based consultancy, estimated sales of mobile games will reach 52.37 billion yuan this year, up 27 percent year-on-year. In 2017, sales are expected to surpass 66.83 billion yuan, up 27.6 percent year-on-year.
But Xue Yongfeng, an analyst with Analysys International, said: "The mobile games market has shown a robust growth since 2012. Mobile games netted 40 billion yuan in sales last year."
Whatever the actual figure for 2015 may turn out to be, Yao Jianjun, CEO of Feiyu Technology International Co Ltd, a leading domestic Internet game developer, knows why sales are surging.
"Games have become an essential part of young people's lifestyle. With the advent of mobile Internet and continuous improvements in hand-held devices' capabilities, everyone can access the Internet and entertainment anytime anywhere, which means a large number of people who had seldom played games in the past are enjoying mobile games now."
Industry insiders said China's mobile games market will record a compound annual growth rate of about 30 percent in the coming years, much higher than that of Web-based games.
Yao said as users' playing habits evolve, they are willing to pay and play games that challenge and stimulate them. Such players are not always looking for free games.
This has created a big business opportunity for mobile games companies such as Feiyu. It has developed some mobile games products, including Carrot Fantasy, Plump Fish and Beauty Warriors, for both iOs and Android users.
The digital games sector in China is powered by more than 20,000 game developers. As of August 2015, they had developed more than 20,000 types of games, according to industry figures.
There are 171 listed games companies with a collective market value of 4.76 trillion yuan. Such staggering growth came on the back of the government's decision to simplify procedures related to registration and operations of such firms.
Last year, the State Administration of Press, Publication, Radio, Film and Television shortened the period of approvals for new games, which are treated as mass media content.
Not just mobile games, even the emerging e-sports may have reaped $250 million in sales worldwide in 2015, according to Newzoo. China's e-sports were expected to earn a revenue of $36.7 million for 2015, which would put the country on top of all Asian markets.
In response, the government has taken steps to stimulate development of the e-sports market. In January, the China Culture and Entertainment Industry Association, which is overseen by the Ministry of Culture, established an e-sports branch to fully develop competitive digital games products, explore recreation and entertainment places, and conceptualize e-sports events.
Going forward, competition in the digital games market will intensify, which could lead to a shakeout and mergers of small and medium-sized games companies, especially in the mobile games segment, according to Niko Partners, a market consultancy focused on digital games in Asia.
Agreed Xue of Analysys. He estimated the growth of the games market will slow.
"Owing to rising costs, some small companies will exit the market, and big companies like Tencent Holdings Ltd will become industry leaders."
Niko forecast that Internet giant Tencent will likely dominate the games market, although Web portal NetEase.com Inc is turning out to be a strong challenger. Besides, other games developers are readying to raise investments to grab a larger market share.
