Chinese video game industry shows new potential for Tech giants

China has the largest number of online video games players in the world. With the recent suspension of the banon foreign consoles – consoles made in the Shanghai’s free trade zone can be sold on the Chinese territory – further developers will soon get into this multi billions market.

However, the video games are still subjected to strong regulationsfrom the Chinese cultural authorities. Each marketing aspect of a foreign video game is investigatedby diverse organs of the Ministry of Education.

Who are the followers and where do we find them?

According to a recent analysis on the video games industry, more than 38 % of the frequent Chinese playersare aged between 16 and 22 years. About 15 % of them are below age 15, while 23 % are more than 33 years old. Furthermore, on average, 67 % of them play online video games more than 7 hours a week.

These gamersoften play at cybercafés where they can easily play and compete against others players. In 2013, it has been estimated that more than 520 million Chinese have played to online video games or on their Smartphone at least twice a week. By 2015, most industry experts estimate that this number should reach 700 million.

Internet connection being faster on the coastal regions, most frequent players is located on the East part of China. Nevertheless, a significant number of frequent players are also located in cities such as Chengdu and Wuhan. With the progressive expansion of the 3G, further followers are expected to use video games on their Smartphones.
The Chinese, just like Japanese and Korean, are fond of online role-playing games. Chinese boys often venture into a long-term play and in riddles, while Chinese girls are attracted by app and games available for the Smartphones.

PC has been overtaken by Smartphones in term of monthly players. This is the result of the attractiveness of new technologies and simplicity of video games for Smartphones.

However, in China, the most popular video games are often free to play. Gamers are simply charged for add-ons.

The rush towards the novelties

With the removing of the ban, the giants of games consoles (Sony, Nintendo and Microsoft)are fightingthe still thin market share of the market of games consoles.

That being said, the leading local developers such as Tencent, Shanda and NetEase have strong market share and footprint on the app and online games.

Thibaud Andre, Daxue Consulting

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