China’s Video Games Sector Reports First Decline in Nearly 20 Years

gamerant.com:

The video game industry in China has reported a significant decline for the first time in almost two decades. Over the past decade, China's gaming industry has undergone a stunning transformation, expanding at an astonishing rate and surpassing the United States in market size. The industry has propelled major global publishing powerhouses like NetEase and Tencent to the forefront of the gaming world.

This impressive growth was fueled by a rapidly growing population that was quickly gaining internet access and increasing financial power, enabling them to purchase gaming products and services. However, as the market approaches saturation, there are signs that the era of exceptional growth for the Chinese gaming industry might be coming to a close.

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According to the 2022 China Game Industry Report released at the China Game Industry Annual Conference in Guangzhou, video game sales generated 265.9 billion yuan ($39 billion) in revenue in 2022, representing a year-over-year decrease of 10.33%. In addition, the report highlighted a 0.33% decrease in the overall number of users to 664 million, when compared to the previous year. These figures have surprised industry insiders and analysts, who were expecting continued growth in the sector.

Several factors are believed to have contributed to this decline. The Covid-19 pandemic is thought to have played a significant role in slowing down new game development. Moreover, the economic impact of the pandemic has affected investment and financing for companies, making it more difficult for them to secure funding for new projects. The pandemic has also taken a toll on the budgets of game users, many of whom have had to tighten