China’s huge video game market is set to decline this year, the first decline in 20 years as the Chinese government takes a tougher line on the games industry.
Leading analyst firm Niko Partners specializes in the Asian market and forecasts mainland China video game software and services revenue in 2022 to be $45.44 billion. This was a 2.5% year-over-year decline, the first decline in market revenue in the 20 years that Niko has tracked the Chinese video game market.
Niko Partners pointed to lower spending on mobile games for the drop. Although this was partially offset by the growth of PC and console games, it was not enough, as mobile games account for around 66% of total game revenue in China. The mobile games sector shrank 5.1% year-on-year in 2022, according to the firm.
A combination of factors affected the shrinking Chinese gaming market. These include general economic trends, with slowing growth across China’s economy, which is the second largest in the world, but there are other pressures at play that come from above.
Government restrictions and a lack of new licenses also fueled the decline. New regulations that limit the gaming time of Chinese minors (those under the age of 18) to just three hours per week are having a significant effect and have reduced the number of gamers.
“China will have 701.8 million gamers across all platforms by the end of 2022, marking the second year of decline, according to Niko’s estimates that 39 million young gamers have stopped playing,” said writes Daniel Ahmad, senior analyst at Niko Partners, on Twitter. “New youth player regulations introduced in September 2021 are the reason for the decline.”
However, all is not gloomy. Niko expects the Chinese market to grow in the longer term, predicting that by 2026 gaming revenue will have reached just over $53 billion and the number of gamers in China will then be 754. ,5000000. That’s a lot of players!