Chinese mobile games from Tencent, miHoYo are still top earners, but a tougher market at home is taking a toll

Honour of Kings, PUBG Mobile and Genshin Impact remained the most lucrative mobile games in the world in the first quarter, but spending has declined
Chinese developers rely heavily on their home market for revenue, but a regulatory crackdown has pushed a game licensing freeze into its ninth month

Mobile gaming

Xinmei Shen

Published: 6:30am, 7 Apr 2022

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China’s biggest mobile games Honour of Kings, PUBG Mobile and Genshin Impact continue to be the most lucrative titles in the world this year amid a tougher gaming market and a prolonged suspension of new video game licences.

Tencent Holdings, the world’s largest video gaming company, continued its reign at the top of Sensor Tower’s list of top mobile games by revenue based on income from Apple’s iOS App Store and Google Play. Its Honour of Kings and PUBG Mobile titles raked in US$735.4 million and US$643 million in the first quarter, respectively.

Genshin Impact, a more recent title from Shanghai-based miHoYo, ranked third with US$551 million in player spending, according to the analytics firm. The game from Tencent’s much smaller, decade-old rival has been an unlikely success story overseas. When released in September 2020, analysts said Genshin Impact had the largest international launch ever for a Chinese game.

China’s latest freeze on new video game licences may surpass previous record delay

While remaining top of the pack, Tencent’s flagship games are seeing the impact of reduced spending on games. Revenue for Honour of Kings fell 1 per cent year on year for the quarter, while PUBG Mobile revenue was down 9 per cent. Player spending across all mobile games was down 7.1 per cent to US$21 billion, despite a 2.1 per cent increase in downloads to 14.4 billion.

Amid this tougher landscape, the three games have extended their wins over rivals from 2021, when they were also the top three earners in gross revenue. From January 1 to December 14 last year, Honour of Kings and PUBG Mobile each earned US$2.8 billion, and Genshin Impact grossed US$1.8 billion.

Roblox, from California-based Roblox Corp, came in fourth place for 2021 with US$1.3 billion in revenue. That game has grown its popularity by acting as a platform through which people can develop and play mini games. The company has promoted it as a metaverse-like platform.

Much of the success of Chinese titles is owed to the revenue generated at home, the world’s largest gaming market with US$46 billion in revenue last year, according to data from Newzoo. In China, PUBG Mobile is available as Peacekeeper Elite, a more patriotic version of the game. Variants of Honour of Kings are available internationally under different names, most notably Arena of Valour.

The Sensor Tower numbers do not include Android revenue in China, where Google Play is not available.

The Chinese titles have maintained strong momentum at home despite recent regulatory uncertainties. Last year, Beijing introduced its most stringent gaming restrictions yet for people under the age of 18 in the name of cracking down on video game addiction.

Amid the heightened industry scrutiny, the National Press and Publication Administration has not issued a new list of games approved for sale in China since last July. Now in its ninth month, and with no signs from regulators that a new list will come this month, the suspension could surpass the country’s nine-month licensing freeze in 2018.

During both freezes, small video game developers were hit the hardest. About 14,000 small studios and other gaming-related firms were deregistered from July to December last year.

ByteDance gaming studio said to lay off dozens of employees

Meanwhile, Tencent and rival NetEase have been ramping up efforts overseas, reflecting the new reality at home.

Other major Chinese tech companies that once sought to take on the country’s two gaming behemoths have been scaling back. Internet search giant Baidu and TikTok maker ByteDance have laid off staff in their gaming divisions.

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