Across The Border | Mobile game market to triple in size to 152b yuan by 2018, with Tencent out in front
4G and Wi-Fi present more opportunities, while quicker pace of life and longer working hours increase demand for entertainment on the move
China’s mobile gaming market may triple in size within three years, which could push the value of shares in market-leader Tencent Holdings to record highs, according to analysts.
The overall internet games sector has been expanding rapidly over the past five years, and was worth 143.6 billion yuan at the end of 2015, according to research by consulting firm iResearch.
That figure was generated by both domestic player consumption and overseas revenue earned by mainland game developers.
The mobile game segment, in particular, saw its market double in size to a historic high of 56.2 billion yuan and it now accounts for 39 per cent of the domestic internet game market, up from 11.6 per cent in 2011, and is expected to hit 60.5 per cent by 2018.
“Tencent’s mobile game business provides sustainable revenue,” UBS analysts Erica Poon Werkun and Angela Xu wrote in a research report.
“We believe the market has not fully priced in the longer-term growth potential of both NetEase [China’s second largest internet and online game services provider] and Tencent’s mobile game businesses.”