The Secret to Growth of The Game Industry in China

Playing games online has grown in China by incredible leaps over the last two decades. According to a report released by Tech in Asia, games industry players made $13.5 billion in 2013.  However, the market is presently dominated by a few million-dollar games corporations. A poll conducted by Analysys International, based in China, reveals that Tencent, Netease and Shanda fill up 65% of the total share of the market.

For young gamers, it makes perfect sense to prefer these big players who can afford to hire disaster recovery service providers, even in the unfortunate event that their game data was to get lost after a compromise of the company servers. The kind of commitment they have to their online games demands that they enjoy uninterrupted playing experience every time they logon.

China’s game online market presents several challenges for global companies that are considering joining the market. The distinctive characteristics of the country’s online game industry is a specific game genres, the imbalance of gender among players and the rapid advancement of Internet technology.

In addition, the integration of the industry structure into the complex environment, which includes government agencies, local game companies and multinational game companies. Put simply, there are significant cultural, economic and political differences between how the game market looks like in China and how it looks like in Western countries.

Online games dominate Chinese market

While the most popular games in western markets are console games, online games in China dominate the market. 1st-person action games and action-role-playing games occupy about 60 percent of the market. 3D graphics games lead in popularity with a market share of 60%, followed by 2.5D at 23% and 2D graphics with 17%.

Online games often attract young gamers, most people of them born after 1980. Those born after 1990 are even more interested with online games because a significant part of their daily lives is spent on the internet. They are also more likely to enjoy the incredible graphics that web designers incorporate in game websites for a groovier online player experience.

Tech in Asia reports that 65% of gamers are 25 years old and younger. In this group of game players, only 25% are female. In the United States, the gender ratio enjoys a better balance. This gender imbalance has a significant impact on games because male players have different preferences to their female counterparts when it comes to graphic styles, game genre and task setting, etc.

Broadband penetration has encouraged growth

The continued growth of online games has been depended to a large extent on internet technology. The spread of broadband has brought with it many new Internet users. In 2000, the number of internet users stood at 23 million. Chinese Internet Network Information Center (CNNIC) now reports that the number had risen to 457 million by 2010. Moreover, given the low Internet penetration of 34% of the Chinese population, this game market still has space for growth.

The smartphone is one of today’s technologies that are directly impacting the game market in China. iResearch published a report showing that the mobile games market share had already hit 14.1% by 2012. Today in China, online games have a 68% market share. Chengdu city, a tech-savvy area in China’s southwest has captured the attention of the tech world with the emergence of hundreds of small application development companies that are taking on the market online by developing games intended for mobile devices.
 

Government policy and censorship

There is no area of life that government policy does not apply in China, including the online game sector. Because of this, the industry has taken a distinct path guided by these policies that are absent in the western game industry. The decision to macro-manage this sector has played a significant role in pushing companies in the game industry to create games that showcase the traditions and history of China. The country’s leadership sees online games as a way of showcasing the rich Chinese culture and history.

The result of this policy has been the creation of themes from classical literature. For instance, game companies have adopted the popular kungfu novels for online games. Another good example of this is a series of games online that Netease, one of China’s biggest game industry companies has produced based on ‘The Journey to the West’, a well-known historical story in China. These games do exceptionally well in China, often making it to the list of the top ten most popular online games in the country.

The communist political culture is also a prominent feature in online games in China. According to the China Communist Youth League (CCYL), finding online games that showcase a revolutionary spirit is extremely rare. Instead, most games are designed to arouse patriotism among young players. These games are meant to help the young players express their patriotic longings, especially in moments when the country is facing some international tension with other countries.

Author: Connor Addis