Chinese Gaming Revenues Decline for the First Time in 14 Years

Game revenues fell 1.8% year-over-year following government-implemented restrictions.

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Revenue generated by the Chinese video gaming industry and the number of gamers in the country both declined for the first time since 2008, according to a report published by the Game Publishing Committee of the China Audio-Video and Digital Publishing Association. The combined revenue in the country's video gaming market decreased 1.8%, while the number of gamers fell from 666.57 million in December to 665.69 million at the end of June.

Domestic revenue from Chinese gaming companies also dropped by 4.25% in the first half of the year, compared to the 8.3% growth of the same period in 2021, and a 30.4% increase in the first half of 2020.

At the same time, overseas revenues from games developed in China rose 6.2% to $9 billion in the first half of the year, although the growth rate slowed significantly from a few years ago.

The decline is linked to the Chinese government implementing regulations on video gaming: a strict licensing system, a censorship mechanism, and restrictions that don't allow gamers under 18 to play more than three hours a week. There was also a nine-month-long freeze on new game approvals that ended in April.

“Because of the overall downturn of the market … overseas businesses have become a breakthrough segment for domestic game development,” said Zhang Yijun, director of the gaming committee. “However, due to the cost increase in growing overseas traffic and the strengthening of international trade barriers, the growth rate in overseas markets is slowing down compared with the same period last year.”

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