November 16—After adding 3.6 million new hobbyists in the third quarter, China’s video game player population is now 661 million, reports the South China Morning Post.
That means the region has more gamers than the combined populations of the United States, the United Kingdom, Japan, Germany, and France.
However, the country’s gaming sector is facing increased competition from the U.S. industry this fall.
The Rapid Growth of China’s Video Game Industry
Chinese citizens lived under lockdown mandates earlier this year to halt the spread of COVID-19. Locals dealt with the situation by increasing their gaming time, earning the nation’s video games industry ¥73.2 billion ($11.1 billion) in the first quarter. That topped U.S. consumer spending on gaming products during the same period by 15.6 percent.
Though local leaders have lifted their most restricted self-quarantine orders, the digital pastime has not lost its popularity. China’s video game revenue totaled ¥68.5 billion ($10.4 billion) in the September period, up 15.72 percent year-over-year.
China Audio-video and Digital Publishing Association reported its mobile gaming industry had fostered the hobby’s growth. That segment of the industry generated ¥50.8 billion ($7.71 billion) of the Q1 revenue. One reason for the sector’s robust income is the regional popularity of hugely lucrative titles like “Honor of Kings, “Peacekeeper Elite,” and “Call of Duty: Mobile.”
The region’s mobile gaming boom has likely been bolstered by the rapid development of China’s 5G networks.
By September, China’s telecommunications companies had brought fifth-generation mobile data speeds to 110 million people. This month, the nation’s Ministry of Industry and Information Technology revealed the country has 700,000 5G base stations, which outpaced its projections by 200,000. That means the Chinese players have greater access to high-speed, low latency internet than any other population.
As its 5G rollout continues, China’s gamer population, and therefore sales, should continue to expand in the New Year.
US Gaming Market Trending Upward
The NPD Group, a retail analytics company, announced U.S. players purchased $11.2 billion worth of video game content in Q3. That meant American gamers increased their spending on new personal computer, mobile, and console products by 24 percent annually. With multiple, long-awaited video game systems launching this month, the region’s Q4 sales will likely be even higher.
On November 10, Microsoft put its Xbox Series X and S consoles on sale. Because the Big Tech firm had not released new home gaming systems in seven years, both sold out at the preorder level in the U.S. Similarly, Sony launched two versions of the PlayStation 5 on November 12, and they also sold out immediately in America.
That surging demand indicates the United States could have the world’s largest video industry by revenue for the second half of 2020.
If that happens, the U.S. gaming market value will have topped China’s for two quarters in a row. That could mean America could hold onto the top gaming region crown for Q1 2021. However, analysts predict the new Xbox and PlayStation system will sell tens of millions of units over the next few years.
That development could prompt U.S. console game makers to focus greater attention on the Chinese market.
Ultimately, international competition would be good news for Chinese and U.S. players. Both countries’ developers would feel increased pressure to launch titles that would appeal to both audiences. That means more innovative, immersive, and fun titles will be released worldwide sooner rather than later.