China Mobile Gaming Revenue Hit Highest Annual Growth Since 2017 in Pandemic Year

China’s local mobile gaming revenue grew 31% year-on-year to $29.2 billion in 2020, notching the highest annual growth rate since 2017, according to market research firm and consultancy Niko Partners.

China’s export game revenue actually grew even more than local game revenue, rising 36.7% last year.

After COVID-19 prompted the Chinese government to impose lengthy stay-at-home lockdown orders nationwide starting last January, the local games market has changed and shifted.

“While China has mostly returned to normal, the pandemic and resulting lockdowns led to major changes in gamer behavior, engagement, and spend throughout the year,” assessed Lisa Hanson, Niko Partners founder and president.

The firm predicts that China’s overall video games market will hit $55 billion with 781 million gamers in 2025.

As of the end of 2020, 682 million of China’s 1.4 billion people are already mobile gamers, up 7% year-on-year. Niko Partners projects that population will grow to 748 million in 2025.

Companies are finding better ways to monetize that growing population of users, the consultancy noted. Monthly average revenue per user and monthly average revenue per paying user both went up last year.

Meanwhile, the pandemic also had an impact on the PC gaming market. Although the overall number of PC gamers in China grew by 1.4% to 325.4 million in China last year, local PC game revenue actually ticked downward by 4.9% to $13.9 billion, highlighting the rising popularity of mobile over computer-based play.

Most PC gamers also play mobile games. The firm predicts that the number of PC gamers will only grow slightly in the coming years to reach 335.3 million in 2025 — less than half the predicted 2025 figure of mobile gamers.

Nevertheless, for now, PC gaming still makes up more than 32% of total Chinese game revenue and nearly 45% of gamers, and Niko Partners estimates the sector will return to growth in 2022.

Tencent and NetEase remain China’s top two game publishers, but they are facing increasing competition from other large tech companies and medium-sized game firms. Tencent is reportedly facing what may be a fine of at least $1.5 billion as the result of an ongoing anti-trust probe, though Reuters has cited sources with knowledge of the matter as saying its core games businesses may escape the investigation unscathed.

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