What’s new: China’s video game industry posted a 10.3% decline in 2022 sales to 265.9 billion yuan ($39 billion), the first drop in five years, according to a report by the China Game Industry Annual Conference.
Total users dropped 0.33% in 2022 to 664 million, the report said. Sales of mobile games shrank 14.4% year-on-year to 193 billion yuan.
Sales weakened as the pandemic impeded new product development and the slowing economy affected companies’ financing and users’ spending, according to the report. Rising competition overseas also hurt Chinese game companies, it said.
According to a separate report by the conference, Chinese game developers’ overseas sales plunged 3.7% in 2022 to $17.3 billion, the first annual drop since 2018.
The context: Tightening regulation set the brake on China’s once-booming video game industry since July 2021 as regulators suspended the issuance of new game licenses for nine months to curb gaming addiction among children.
The National Press and Publication Administration (NPPA) issued 468 Chinese game licenses in 2022, 38% fewer than in 2021 and just 33% of the number for 2020, according to Caixin calculations based on publicly available data.
The industry has shown signs of recovery as China’s economy reopens and regulators resume the pace of new license approvals. But some industry sources said it is unlikely that the industry will return to its peak levels of 2017 and 2018 as regulators are likely to maintain relatively tight control over the industry.
Last week, the NPPA approved a batch of 87 new video games, with major players Tencent Holdings Ltd., ByteDance Ltd., and XD Inc. receiving licenses.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
Get our weekly free Must-Read newsletter.
