China’s Mobile Gaming Segment Getting Bigger

China’s mobile gaming space is getting greener and luscious with mobile gaming segment not only staking an increasingly significant claim in the overall digital games market but also contributing nearly 40% of the country’s total digital games revenue.

Analytics firm DataEyeputs total revenues in mobile gaming at $7.94 billion including revenue from exported games for the country. Another independent research by Niko Partners puts in-country revenues at $5.5 billion — higher than that of the U.S., but lower than the roughly $18 billion in PC online revenue.

Though online PC gaming might still be way ahead of mobile segment, the interesting factor is the pace of growth of mobile gaming. In 2012, mobile accounted for just 5.4% of all gaming in China. Last year, it accounted for a whopping 36.6%, if you include the export value (as DataEye does).

Here are some of the key factors that point toward an industry rapidly growing into maturity:

PC Giants Moving In

This was perhaps the most significant trend in the mobile gaming space last year- the arrival of China’s top PC online gaming companies on the scene. The top 7 companies, which includes NetEase, Tencent, Giant among others — released over 150 mobile games in 2015, with Tencent and NetEase accounting for the top 10 titles just between the two of them.

The top 7’s expansion into mobile gaming serves as powerful validation that mobile gaming is a space worthy of their efforts, and it will be interesting to watch how the big players shape their mobile gaming presence moving forward.

Creativity on a high with Smaller Cos

Big giants moving into bet big in a new space, serves as huge validation of the market’s inherent opportunity. So, in the face of mounting competition and the increased cost and reduced market share it brings with it, small- to medium-sized companies are taking advantage of their biggest asset — their ability — and using it to move in new directions and forge new paths into emerging markets. Animation and comic-based games, warfare games, indie games and female-centric games— the so-called “niche” segments — have all proven to be promising stomping grounds for small- to mid-sized companies looking to get away from the marquee competition and re-establish themselves on new turf.

eSportsCraze

Running in tandem with the arrival of the Chinese gaming giants on the mobile scene is the rise of mobile eSports. This is perhaps less surprising, given that eSports was clearly one of the major trends in the Chinese gaming industry as a whole last year, but what is surprising is how quickly an infrastructure emerged to support mobile eSports.

Developers and publishers are working hand in hand with eSports clubs, event organizers, sponsors, e-commerce sites and live broadcast platforms to build out a fully realized eSports ecosystem, making mobile eSports an area to watch moving forward.

Multi-Screen (“Pan entertainment”) Gaming

“Pan-entertainment”- cross-sector collaboration between mobile gaming and other media, including books, films, animation and comics is the also a factor that is driving growth in the Chinese mobile gaming industry. IP-based games accounted for 16% of the total mobile gaming market, suggesting that mobile gaming may be benefiting from converts, as fans of various media find their way into mobile gaming through their favorite properties. Also worth noting is that it seems only 4% of those games had official authorization to use the IP in question — indicating that game creators may be playing a little fast and loose with legalities in their quest to thrill gamers with mobile games based on their favorite media.

HTML5 Mobile Games

Another trend to watch in mobile gaming in China is HTML5 games. The ease of use for coding provided by HTML5 has made it a popular playground for game developers.   By the end of 2015, there were more than 3,000 HTML5 mobile games active in China. 75% of those games fall in the casual games category; however, there’s also been a surge in higher monetized games, such as RPGs.

A unique trend identified by DataEye is the increasing use of games developed in Android — or Alibaba’s competing operating system, AliYun — for TV-based gaming. This is a nascent space in the Chinese gaming scene, and as such is ripe for growth, which would push mobile game development even farther into the TV platform.

Leaving aside revenues that will continue to grow in 2016, all these findings and development bode well for gamers in China- more options, and the opportunity to be more discerning and demand the high-quality games that they want.