China extends its lead as world’s largest video games market

A new reports from IHS Markit has predicted that the Chinese video game success story is going to become even more important over the next few years.

In 2016, the Chinese video game market was worth $25.6bn, and this is expected to grow to $29bn this year. This makes it the biggest player in the PC and mobile sectors by quite some margin.

PC accounted for 51 per cent of the total 2016 spend. However, the mobile market grew by 55 per cent last year and is expected to overtake PC before the end of 2017. The console install base remains at under 500k units.

In PC, microtransactions account for 88 per cent of the total spend, while gaming giant Tencent alone claimed 59 per cent of all PC spending. Spending on full PC game downloads has grown a lot, too jumping from $54m in 2015 to $220m in 2016. In fact, China is the fourth biggest global market for full PC game downloads.

The real growth is to be found in mobile, however, with 24 per cent growth expected this year.

Five years ago as growth outlook in the China PC games market started to slow and mobile game consumption increased rapidly most established PC games publishers in China made an aggressive and committed diversion to the mobile sector,” IHS explained.

The popularity of PC-like games experiences is further illustrated by the success of Tencent’s Honor of Kings a mobile MOBA title often compared to the world’s most popular PC online game, Tencent-owned Riot Games’ League of Legends. Tencent, who is busy developing its domestic eSports strategy for Honor of Kings, views the title as non-competitive with League of Legends and actually considers it an acquisition vehicle for expanding League of Legends further.”

How much of an opportunity remains for the console sector is uncertain.

The slow adoption of PS4 and Xbox One reflects the difficulties of having to compete with the entrenched PC and mobile games markets and existing grey market console imports from Hong Kong and Japan, which are often cheaper than the official versions of the consoles”, IHS said.

Sony did at least enjoy a mild” upturn in sales this year, and will likely be helped by the aggressive pricing of the PS4 Pro in the region.