Gaming fans pose for photos at a convention in Shanghai. China had 383 million mobile gamers last year. Photo: SCMP Pictures

China to overtake US as world's largest mobile gaming market by 2016

China will overtake the US as the world's largest mobile gaming market in 2016, according to a new white paper released this week by the Global Mobile Game Confederation.

China will overtake the US as the world's largest mobile gaming market in 2016, according to a new white paper released this week by the Global Mobile Game Confederation.

Citing data from market research firm Newzoo, GMGC predicted that revenue from mobile games in China will reach US$7.7 billion in 2016, compared to US$7.3 billion in the US.

"The fastest growth in mobile games is happening in China and the surrounding Southeast Asian market," said Peter Warman, co-founder and chief executive of Newzoo.

Global mobile gaming revenue is expected to hit US$30.1 billion in 2015, up from US$24.5 billion this year, according to GMGC. The report predicted that by 2017, worldwide revenue from mobile games will reach US$40.4 billion. Global box office revenues, by comparison, are projected to be US$44.5 billion that year, according to PricewaterhouseCoopers. 

"Mobile games will grow to account for one third of the global games industry in 2015," the report said.

The Asia-Pacific region remained by far the largest mobile market in the world last year, with more than 760 million mobile gamers generating US$13.6 billion in revenue in 2014. The US remained the largest single-country market, at US$5.2 billion.

Chinese growth will be driven by an increase in smartphone users and a rise in the number of paying gamers as the country becomes more affluent, the report added.

In 2014, there were a total of 383 million Chinese mobile gamers, compared to 137 million in the US. This will increase to 475 million and 157 million respectively in the next three years, according to GMGC.

“China’s just growing so fast that I expect that China itself will be larger than our US revenues,” Kevin Chou, chief executive of California-based game developer Kabam, told the Post this month.

Kabam, which produces hit mobile titles including Marvel Contest of Champions, based on the popular film and comic book characters, is releasing its first Chinese title later this year.

“Asia’s just an incredibly important part of our growth strategy, about 60 per cent of our revenue today is from the US market and 40 per cent of our revenue is from European markets and Asia is nothing for us today,” Chou said.

In August 2014, Chinese e-commerce giant Alibaba Group Holding invested US$120 million in Kabam, which opened a research and development centre in Beijing in 2009.

According to Newzoo, Chinese web and mobile giant Tencent was the number one gaming company by revenue in 2014. Though relatively unknown among Western gamers, Tencent is a majority shareholder in a number of successful companies including Riot Games, producers of League of Legends

The next highest ranking Chinese company was Netease, which posted revenues of 3.7 billion yuan (US$597 million) in the last quarter of 2014, with mobile games contributing to around 15 per cent of total game sales. 

This article appeared in the South China Morning Post print edition as: China winning mobile game market