Chinese game developers in the mobile gaming industry have left their mark in the global gaming market, securing unprecedented achievements through innovation, technological advancement, and cultural adaptation. Tencent and NetEase, among others, did not only sweep the local markets but also extended their presence overseas, altering the global gaming market in the process.
1. Domination in the Global Mobile Gaming Market
Chinese companies have secured a substantial share of the global mobile gaming revenue. As of 2024, China accounted for more than 31% of global mobile gaming revenue, generating approximately $40 billion annually. Tencent’s Honor of Kings, for instance, surpassed 100 million daily active users globally by the end of 2023, reinforcing its position as a flagship mobile title.
2. Global Strategic Expansion
The worldwide popularity of Chinese online games is owing to well-planned overseas expansion policies:
- Localized Content: Developers tailor game content to resonate with regional cultures. For example, NetEase’s Knives Out achieved remarkable success in Japan, surpassing $2 billion in lifetime revenue by November 2022, with 90% of this income originating from the Japanese market. This success is attributed to collaborations with popular local brands such as One Piece and Evangelion, as well as aggressive advertising campaigns and exclusive perks tailored for Japanese players.
- Technological Innovation: Chinese developers have integrated advanced technologies to enhance gaming experiences. NetEase, for instance, has incorporated AI-powered features into its mobile games to enrich player engagement and retention. In Cygnus Enterprises, AI is utilized to create dynamic non-player characters (NPCs) that interact with players in a more lifelike manner, thereby enriching the gaming experience.
3. Cultural Integration and Collaborations
Chinese mobile games have expanded their universes through collaborations with global cultural figures and brands. For instance, Honor of Kings has partnered with renowned composer Hans Zimmer and brands like Hello Kitty, enhancing its global appeal. The game has also expanded its universe with comics, television series, and collaborations with cultural figures, exemplifying the integration of gaming with broader entertainment mediums.
4. Monetization Strategies
Chinese developers were successful in implementing monetization schemes that catered to diversified player bases:
- In-App Purchases (IAPs): Games offer cosmetic upgrades, weapon skins, and premium battle passes. Tencent’s PUBG Mobile, for example, surpassed $10 billion in global player spending by June 2023, with a significant portion of this revenue—approximately 60.3%—originating from China.
- Hybrid Monetization: Combining IAPs with in-app advertising (IAA) maximizes revenue. In China, approximately 60% of mobile game revenues are derived from in-app advertisements, indicating a balanced approach between player spending and ad-based income.
5. Challenges and Criticisms
Despite their popularity, Chinese mobile games suffer from:
- Market Saturation: The focus on acquisitions over new game development has led to concerns about stagnation. Ilkka Paananen, CEO of Supercell, criticized industry rivals for prioritizing acquisitions over creating new games, arguing that the mobile gaming sector has stagnated since 2021.
- Regulatory Scrutiny: Chinese gaming companies operate in very complex regulatory environments in their home country and overseas, which can impact game approvals and content.
Conclusion
Chinese game developers have played a major role in shaping the global gaming industry through expansion, technological innovation, and cross-cultural alliances. In spite of difficulties, their innovation and flexibility remain major drivers behind their global successes.