Veronika Mikhailova

Niko Partners: the digital gaming market in China will earn $33 billion by the end of the year

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China’s two largest gaming companies are predicting a great year. As well as the entire local digital games market. Its turnover may reach $33 billion by the end of the year.

This is what analysts at Niko Partners think. They analyzed the financial indicators of the market for the first half of the year and made a forecast for the end of the year.

According to their research, after the cancellation of the game licensing freeze, Chinese game dev is recovering quickly. Since December, 1,240 games have been licensed in China, both local and foreign. It is predicted that in 2019, revenue from PC and mobile titles will grow by 7.3% in annual terms.

Market experts are particularly interested in the state of Tencent and Netease. After all, these giants account for 70% of gaming revenue in China.

General figures

  • The total revenue from Tencent and NetEase games for the first six months amounted to $11 billion. This is 8.6% more than a year ago.
  • During the same period, mobile revenue of both companies increased by 13.4%. Desktop, on the contrary, fell — by 0.1%.
  • By the end of the year, the forecast for mobile revenue is positive. It can show an increase of 18.3%. The desktop version will decrease even more – by 4%.

Game for PeaceTencent

  • The company’s gaming revenue in the first half of the year reached $7.8 billion. This is 3.4% more than in the same period of 2018.
  • After the return of licensing, Tencent did not start earning money back at home immediately. In the first quarter of the year, he released only one game. But in the second I received 14 licenses from the regulator and launched 10 new products.
  • Tencent had few new PC titles, and therefore revenue from this segment declined.
  • One of Tencent’s biggest new projects is Game for Peace (also known as Peacekeeper Elite). Now its DAU is 50 million players. The game’s revenue has exceeded $600 million since May.
  • Another newest title, Let’s Hunt Monster, recently broke the $50 million revenue mark. We wrote about the game in detail here.

OnmyojiNetEase

  • Gaming revenue in the first half of the year — $3.2 billion. The growth compared to the first half of 2018 was 23.7%.
  • Since December, NetEase has received 10 licenses to release games in China.
  • Unlike Tencent, NetEase manages to increase revenue from the desktop. She actively launches new titles, but most importantly — updates the old ones. The latter was the main generator of revenue growth.
  • Considerable NetEase income in China is generated by new products Invincible, Identity V, Onmyoji. The latter, by the way, took the first place in sales on iOS this year (just thanks to updates).
  • The company also launched several new games abroad in six months, and also actively entered into partnerships with major brands like Marvel and Pokémon.

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