China gaming crackdown: sales shrink for first time in two decades amid regulatory pressure, slowing economy
- The decline marks the first drop in game sales in China since figures became available in 2003
- Challenges include limited R&D activities, tighter recruitment market, weak investment confidence and declining consumer expenditure
Video game sales in China slumped over 10 per cent in 2022, marking the first drop in at least two decades, as economic headwinds, regulatory pressure and sluggish consumer demand continued to weigh on the once-booming industry.
The world’s largest video gaming market recorded total revenue of 269.5 billion yuan (US$40.1 billion) last year, down 10.3 per cent from 2021, with the number of gamers slipping 0.33 per cent to 664 million, according to a report published last Friday by the Gaming Publishing Committee of the China Audio-Video and Digital Publishing Association, the country’s semi-official gaming industry association.
The decline marks the first drop in game sales in China since figures became available in 2003. The report used data compiled by video gaming analytics firm CNG.
“The whole industry is under pressure,” said the association in its official WeChat post last Friday, attributing the decline to Covid-19 restrictions, which were not relaxed until December.
The association broke down industry challenges into several factors, including limited production and R&D activities, a tighter recruitment market, weak investment confidence, declining consumer expenditure and strong overseas competition.
Mobile game sales, which account for over 70 per cent of total sales, declined 14.4 per cent to 193.1 billion yuan. That is a big change from 2014, when mobile game sales surged over 140 per cent amid huge growth in mobile internet users in the country.