What We Can Learn from China’s Mobile Gaming Economy

For the past few years, the mobile gaming industry has been in upheaval, making it impossible to forecast what will happen next. China has had its own set of problems, primarily resulting from the country’s attempt to control the market and ensure more security and privacy to all parties involved. Despite this, China’s mobile economy has been booming over the past 18 months. 

Last year was a great year for China’s mobile scene, with mobile app developers discovering new audiences and experimenting with new mobile advertising channels, many of which are here to stay – China expected to have 681.7 million mobile gamers by 2020. Furthermore, the country leads the way in terms of gross income, accounting for nearly 35% of global mobile gaming revenue in 2020.

Publishers in the West have taken notice, but recent regulatory crackdowns have caused some to hesitate. What can do to alleviate some of these concerns and enable global game producers to get access to the market? It may be argued that Chinese digital behemoths like Tencent and Netease anticipated these limitations and prepared for them by investing in and purchasing foreign studios. Tencent has made over 30 gaming investments, including Roblox, Supercell, Riot, and Voodoo.

Chinese publishers that adopted a worldwide approach saw a 36.7 percent gain in revenue in 2020, with income from overseas markets outpacing revenue from China. Publishers are shifting away from ISBN-restricted games with in-app purchases (IAP) and toward fan-friendly free-to-play (F2P) games with well-executed ad revenue structures, which is fueling this trend. Given that mobile gaming behemoths like Zynga and Scopely have a winning formula for gaming IP and enough resources, there is room for cross-platform expansion in the industry. To be clear, this is a lofty aim, but it may be necessary to maintain user and revenue growth.

Publishers interested in expanding into the East are encouraged by the success of Chinese studios in exploiting intellectual property (IP) like Journey to the West in their home markets. Zynga has taken notice of this and is investing wisely in the industry with Harry Potter IP titles and a new Star Wars mobile game. Kabam’s Marvel IP has also been a hit, with Contest of Champions, a free-to-play action mobile game, topping the charts in the United States. Kabam then teamed up with Netease to localize the game for the Chinese market.