Niche market approach could ward off slowdown: experts
As the world's largest market for mobile gaming, China is set to embrace steady double-digit growth for the sector in the next few years despite signs of a slight slowdown, experts said on Thursday.
China's mobile gaming market saw a big jump in the first quarter of 2017, with revenues hitting 27.5 billion yuan ($4.04 billion), up 20 percent quarter-on-quarter, domestic media outlet citnews.com.cn reported Wednesday.
The value of China's gaming market is set to reach 200.4 billion yuan in 2017, with mobile gaming accounting for 56.5 percent, global market research company IDC said in a note sent to the Global Times on Thursday.
Meanwhile, the number of Chinese game players will exceed 600 million this year, with mobile game players reaching 580 million, among which users under the age of 12 will reach 42.76 million, IDC said.
In 2016, mobile games became the largest segment of China's gaming market with the number of users reaching 521 million, according to a research report released by Shanghai-based market consultancy iResearch in May.
"China's large Internet market, relatively advanced telecommunications level and high penetration of mobile phone ownership have made the success of the mobile gaming industry more likely," Xue Yongfeng, an industry analyst with Beijing-based market consultancy Analysys International, told the Global Times Thursday.
China is the No.1 market in the world of mobile gaming in terms of diversity of product design, user base and profitability, Xue said, adding that the level of creativity could still be improved.
"Most Chinese mobile gamers are aged from 20 to 30, and male players account for 70 percent of them," Zhou Zhaoning, an analyst at IDC China, told the Global Times on Thursday.
In terms of revenue, in-game purchases tend to generate more than 90 percent of revenue for game operators, Zhou said.
For example, in Tencent's top mobile game, "Honor of Kings," a newly launched skin for Zhao Yun, a historic figure in China's Three Kingdoms period, earned 150 million yuan for the company in one day, according to Cao Shanshi, a well-known business commentator, FromGeek reported Monday.
As of the end of May, more than 200 million people are registered "Honor of Kings" players, the report said.
"The mobile gaming industry began to see a great leap forward in 2015. The growth rate is slowing this year, but we are still talking about double-digit growth," Zhou said.
Strategic shift
China's mobile gaming has experienced explosive growth in the last two years, but it might not continue at quite such a high rate, according to the iResearch report.
The report said that China's gaming industry, including both PC-based games and mobile games, should seek breakthroughs in terms of more refined operation, product creativity, industrial integration, internationalization and other aspects.
"The industry has come up with a strategy to shift from trying to develop and promote a game for all to a game for a selected few," Zhou said, noting the niche market approach has proved successful.
According to Zhou, China's mobile gaming industry is also expanding in overseas markets. In 2016, about a third of gaming revenues were generated from overseas markets.
Asian games market research firm Niko Partners estimates that Chinese mobile game exports generated $1.3 billion in revenue from foreign markets in 2016. And the figure is expected to hit $2.1 billion by 2020.
Due to cultural differences, some Chinese companies focus on developing mobile games specially for Western users. Some games on overseas platforms may look like a complete Western-designed game to users, but if you look at its developers and publishers, they may be Chinese, Zhou said.
However, the U.S., Japanese and South Korean markets tend to be hard nuts to crack, as users are more picky about the content and quality of the games. But that has not stopped enormous Chinese success in other Southeast Asian markets, where there is a large user base, no local gaming industry, and limited cultural differences that might hinder the popularity of these games, he added.
