On November 16, People’s Daily, one of China’s official media outlets, published an article entitled “the opportunity in the gaming industry cannot be missed”, saying that video games have already become an industry of great significance to a country’s industrial development and technological innovation. The news sent stock prices of Chinese game makers in Hong Kong shooting upwards. XD Inc. rose by 17%, CMGE Technology rose by 10%, Bilibili and iDreamSky rose by over 6%, and Netease and Tencent rose by about 3%.
The article states that games are inseparable from cutting-edge technology. At present, game technology plays an important role in helping the development of advanced technologies and industries such as 5G, chips and artificial intelligence. With the rapid development of the digital economy, game technology has been applied to several different fields such as cultural heritage protection, industrial simulation, smart cities, film and television creation, etc.
As for game addiction, the media outlet suggested paying equal attention to supervision and development. Under the backdrop of international technology giants seizing opportunities brought on by games, China needs to have a more objective and diversified approach to the industry, and make a long-term development plan.
According to CNG Data, in the third quarter of 2022, the sales revenue of China’s game market was 59.703 billion yuan ($8.44 billion), down 12.61% month-on-month and 19.13% year-on-year. The revenue of Chinese games in markets ex-China was $4.262 billion in the third quarter, down 3.91% from the previous month and 14.18% from the previous year.
This is related to the weakening of the global game market. According to Sensor Tower‘s data, the global mobile game market revenue in Q3 reached $19.3 billion, down 12.7% year-on-year.
From the supply side, approval numbers authorizing the release of new online games in China have been released since July this year. The official website of the State Press and Publication Administration issued 67, 69, 73 approval numbers in July, August and September respectively, for NetEase, Tencent and other large and medium-sized manufacturers. Based on the outlook issued by the Ministry of Commerce and other departments on July 21, the quantity of approval numbers are worth looking forward to.
From the demand side, according to Quest Mobile‘s statistics, the monthly usage time of game apps has decreased slightly. Under the expectation of less revenue given by users, the ability and willingness to pay for games has also been reduced.
As for game makers, Tencent‘s international market game revenue in Q3 increased by 3% to 11.7 billion yuan, while that in the Chinese market decreased by 7% to 31.2 billion yuan. Bilibili recently released an internal email, announcing the adjustment of the game business. Related divisions will report directly to CEO Chen Rui.