The video game player population in China touched a new high in June 2023. According to a Reuters report, China’s video game player population rose to 668 million. The report was credited to a government-run game industry association, CGIGC.
The Thursday, July 27, 2023 report means China’s video game market has returned to growth. It also signals the end of a brutal crackdown on the industry. The report shows that about half of the country are gamers.
CGIGC announced the data at a conference in Shanghai. The association also said sales revenue of the domestic gaming market hit 144.263 billion yuan (approx. $20.23 billion) for the first half of 2023.
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“Against the backdrop of a sluggish global gaming market, China’s gaming industry is gradually emerging from a trough and showing an upward trend,” said Zhang Yijun, a director at the CGIGC, at the conference. “Facing the challenges of the second half of the year, we still need to boost industry confidence.”
China’s video game player population shrank for the first time in 2022 after a prolonged government crackdown on the industry following gaming addiction concerns. The crackdown ate into the market value and revenue of most of the domestic gaming giants including NetEase and Tencent Holdings.
Although the industry is recovering, it is yet to hit the pre-crackdown revenue level. The revenue from China’s video game player population in the first half of last year was 150.493 billion yuan which is over 6 billion yuan higher than the record for the same period this year.
Chinese authorities applied the brakes on the approval of new games for almost eight months between 2021 and 2022 during the peak of the crackdown. However, they have now loosened regulations.
The brutal crackdown led to the withdrawal of gaming giants from China
Ubisoft Entertainment was one of the gaming giants that exited the Chinese market during the height of the crackdown on the gaming industry. The French publisher behind Assassin’s Creed said in early June that it “no longer operate its merchandise sales business in China” in line with its “strategic adjustment”.
Following that announcement was the revelation that Ubisoft’s store on Tmall (an e-commerce platform) would shut down on Wednesday, June 7, 2023, according to South China Morning Post.
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“After a review of our collectibles and merchandising products strategy in China, we have decided to stop our direct sales in the country,” said a Ubisoft China spokesperson. “We will continue to launch products in collaboration with licensing partners, and these will be available on the sales channels of our partners.”
The decision to stop selling on Tmall did not go down well with China’s video game player population. The majority of them took to social media to express their dissatisfaction. Blizzard Entertainment also shut down its game services in China in January after the expiration of its licensing agreement. Epic Games pulled the plug in November 2021.
China’s video game players will be hit by a wave of new games
Chinese regulators approved a new batch of game licenses on Wednesday, July 26, 2023. A total of 88 games were given the nod for release into the market in July. According to Citi Bank analyst Alicia Yap, about 90 games are approved monthly which totals between 1,000 and 1,100 domestic games for the whole of 2023. This is about twice the 2022 figures.
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“We remain confident about a steady domestic game approval process heading into (the second half of this year,” wrote Yap.
However, the rate of approval of games for the growing China video game player population appears to happen at a much higher rate compared to the actual release of the games. State-media Securities Daily reported on Wednesday that out of the 88 games approved as of January, only 23 have launched or have verified launch dates.
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