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Chinese game studio XD makes US a priority in its overseas expansion drive as home market becomes increasingly difficult to navigate

  • Game studios like XD are looking to expand overseas to offset the slowdown at home as Beijing slows down the allocation of domestic licences
  • XD has formed a dedicated team for the US market, which is working on adding US-specific tweaks to its TapTap games store and testing upcoming projects

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Shooting game T3 Arena, one of the four games that XD plans to launch globally this year. The Shanghai-based company plans to make the US and Japan the primary markets to test the games. Photo: Handout
Ann Cao

Chinese gaming company XD is eyeing the United States as it accelerates its global expansion amid increasing competition and harsh regulations at home, a company executive said.

The plan to reach US players is a key part of the Shanghai-based company’s strategy to turn a profit as early as next year, said senior vice-president Zhang Xiang in an interview with the South China Morning Post. The US market, where players have a “better understanding of games”, will serve as a testing ground for the overseas expansion, Zhang said.

The idea of venturing abroad, notably the US, has become popular among Chinese game developers as the home market is becoming increasingly hard to navigate amid strict licensing, ruthless censorship of gaming content and fierce competition. NetEase, China’s No 2 gaming company, said over the weekend that the launch of a highly anticipated title, Diablo Immortal, in China was postponed indefinitely, while ByteDance, an XD investor, has dismissed a major game studio in Shanghai.
For game studios like XD, it is getting harder to get a greenlight from Beijing to launch new titles at home. After an eight-month suspension, China resumed issuing gaming licences in April, allocating only 45 permits – one of which was granted to XD’s fighting game Flash Party.
XD’s fighting game Flash Party, which was among the 45 licences issued by the regulator in April, was launched in China 12 days after the announcement. Photo: Handout
XD’s fighting game Flash Party, which was among the 45 licences issued by the regulator in April, was launched in China 12 days after the announcement. Photo: Handout
Hong Kong-listed XD, operator of the TapTap games store, has been pushing into Southeast Asia and India, as the distributor of Tencent’s PUBG Mobile and its self-developed fighting game Sausage Man. Its overseas version of TapTap had 12.2 million monthly average users at the end of 2021, up 154.3 per cent year on year.

Zhang said it was already becoming second nature for Chinese gaming companies to expand overseas amid a boom in mobile games, with Beijing’s hardening attitude accelerating the pace. China’s move to slow down the issuing of gaming licences, for instance, is hurting small studios badly, leaving many with no choice but to look to overseas markets, he added.

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