Market Analysis Predicts China Extending Lead as World’s Largest Gaming Market

Market Analysis Predicts China Extending Lead as World’s Largest Gaming Market

China continues to dominate the video game market.

A recent IHS Markit Insight report is projecting that China will continue to extend its lead as the country with the largest market for video game content. China’s games market, as the report claims, represented 25 percent of the gaming market in 2016, and is projected to grow by almost four billion dollars.

Most of this revenue is brought in via China’s PC ($13.1 billion) and mobile game ($12.4 billion) markets. An observation IHS Markit notes: with Overwatch sales on the decline, PC game sales are actually expected to drop in 2017. What enables the Chinese game’s market to continue to grow is the focus on the mobile games market, which is forecasted to grow by another 24 percent.

While PC game sales may be in decline in China, it is also important to note that China’s PC game market was made up almost entirely of microtransactions, with services like Tencent, operators of Crossfire and League of Legends, and NetEase, Blizzard’s long-time Chinese publishing partner, making up the majority of sales.

Meanwhile, the Chinese console market continues to crawl with Console revenue making up only $24 million in sales, and the total number of (non-grey market) PS4 and Xbox One consoles remained under 500 thousand; however, the release of the PS4 Pro at an aggressive and competitive price point may lead to increased console growth for Sony’s console.

On the whole, China is expected to see growths in its Mobile game market, especially with Tencent’s recent work on Honor of Kings, the company’s mobile MOBA title. The report claims Tencent “considers [Honor of Kings] an acquisition vehicle for expanding League of Legends further.”