Economic Watch: What propels Chinese gaming industry to gangbusters boom

by Xinhua writer Zhong Ya
TOKYO, Sept. 28 (Xinhua) — China’s blockbuster game “Black Myth: Wukong,” acclaimed by game enthusiasts as “game of the year,” has triggered a Chinese game craze across the world.
Yet, the proof of the Chinese gaming industry going gangbusters is far beyond that. At the Tokyo Game Show (TGS) 2024 kicked off Thursday, Chinese exhibitors are under the spotlight with record numbers and quality products, wooed by game professionals and lovers from across the world.
WINNING GLOBAL RECOGNITION
A record 985 companies and organizations from 44 countries and regions are showcasing their products and services at this year’s show held at the convention center of Makuhari Messe in Chiba prefecture, east of Tokyo.
The TGS, one of the top three game shows in the world, attracted 535 exhibitors from overseas, including more than 70 Chinese companies. Particularly, China’s mobile gaming drew special attention. “Around 10 percent of Chinese exhibitors are mobile game companies, which represents some 80 percent of the mobile game sector at the TGS,” said Xue Hui, general manager of Shanghai Lizhi Business Information Consulting Service Center, who was in charge of coordinating with Chinese exhibitors for the show.
Game enthusiasts from Japan and other nations were queuing up Thursday to experience Chinese mobile games featuring Nijigen (two-dimensional space) characters or Chinese historical stories.
“Chinese mobile game companies have an edge over their Japanese rivals. In recent years, an increasing number of Japanese game developers are handing over game IPs to Chinese partners for co-development,” said Xue.
Other types of Chinese games, such as single-player and console, also won popularity at the show. S-GAME showcased Phantom Blade Zero, an action role-playing game with hack-and-slash elements, which attracted more than 500 people to try out this single-player game on Thursday.
“Traditional Chinese culture has provided background content and spiritual inspirations for the game,” said Anni Pan, director of marketing and IP operations of the Beijing-based game maker. “For example, the creation of one boss was inspired by lion dance from China’s Guangzhou, and the mountain path scenes in the game are based on real landscapes of Yandang Mountain, one of the top 10 famous mountains in China.”
Dost Kayaoglu, a Turkish YouTuber, regarded Phantom Blade Zero as an important reason to visit the show. “The animations are fluent. Game plays are tight. The period timing is great. I really like it,” he said, adding that he really wants to visit China after playing the game.
FOUR WHEELS DRIVING DEVELOPMENT
Advantages in talent, technology, funds, and the strategy of developing overseas markets have powered up the momentous growth of China’s gaming industry, according to game observers.
Adequate talents have laid the foundation for the boom of China’s gaming industry. The development teams of large Chinese game makers such as NetEase and Tencent are generally at the level of 30,000 to 50,000 people, said Xue. According to data by Liepin’s Big Data Research Institute, nearly 70 percent of the talents are under the age of 30, providing sufficient vitality and impetus for the industry.
“Chinese game makers are investing heavily to develop various types of products, which gives them a good chance to gain a foothold in the global market,” said Liang Yi, publishing director of GRYPH FRONTIER, which showcased Arknights: Endfield, a real-time 3D RPG with strategic elements at the TGS.
According to data by CNG, an organization publishing the China Game Industry Report, Chinese game companies have increased their development investment for five consecutive years since 2019, and in 2023, the top 50 Chinese listed game companies invested a total of 47.91 billion yuan (6.83 billion U.S. dollars) in product development, marking a 3 percent year-on-year increase.
Technology-wise, “China’s mobile gaming industry has found its edge in game development, distribution, publicity and flow buying,” said Xue.
In addition, Chinese gaming companies are expanding their overseas markets to generate higher revenue.
An increasing number of Chinese game companies are issuing products at domestic and foreign markets simultaneously, and some even give priority to overseas releases, said Xue, adding that games with low domestic sales could achieve sustainable development by relying on overseas revenue.
He Wei, professor of the School of Arts & Communication at Beijing Normal University, said China’s self-developed shooting, strategy, and role-playing games started to test overseas markets in the first decade of the 21st century, and over time have gained a firm foothold in foreign markets.
Since 2020, self-developed Chinese games have recorded an overseas market revenue of over 100 billion yuan (14.26 billion dollars) for four consecutive years, and a great number of mobile games have been ranked at the top of various charts in the world’s mainstream markets, and have started to win important international awards.
MORE POTENTIAL TO BE TAPPED
Chinese game makers could release more hidden energy by going overseas, observers said.
Developed game markets like Japan have nurtured mature user habits, such as game players feeling more willing to pay. While mobile games account for around 80 percent of the Chinese market, they merely represent less than 10 percent in Japan, leaving big opportunities for Chinese game developers to tap into, observers said.
They also noted that Japan is the birthplace of Nijigen, a key focus of Chinese exhibitors at the TGS, and is severely experienced in game IP development.
“Chinese game makers would benefit substantially if they work with Japanese partners on story scripting and character design. With its cutting-edge technological strength, Chinese game makers can create more globally influential IPs like the ‘Black Myth: Wukong’,” said Xue. ■