China’s Gaming Crackdown Causes Its First Ever Market Decline
China's official figures have shown that its video games industry has declined for the first time since data has been made available. The country's massive video games sector, which is the world's largest, has seen its revenues fall in the first half of 2022 for the first time since data became public 14 years ago (via Reuters).
The sector's combined revenue dropped 1.8 percent to 147.7 billion yuan ($21.8 billion) in the six months ending June. That's according to the state-backed industry group China Audio-Video and Digital Publishing Association which released a report today. This decline comes amid the Chinese government's tightening squeeze on the industry with restrictive regulations and slowdowns in publishing approval for new games.
This decline, the first since data has been published since 2008, shows the effect Beijing's policies has been having on the sector, which has previously grown rapidly over the years. Companies such as NetEase and Tencent, which are some of the biggest games companies in the world, have been affected, as well as the large number of smaller studios and indies making games for the domestic market.
Beijing's hampering effects include introducing new regulations that restricted minors from playing online games, limiting the time they could spend playing daily, and reducing the number of gaming licenses being approved. To this day, many titles from Tencent and NetEase are still waiting to be approved for sale.
The industry report also revealed that the number of gamers in China has fallen, declining from 666.57 million, as reported in December, to the new figure of 665.69 million. Domestic revenue for China's games companies has fallen 4.25 percent to 124.5 billion. With these tightening regulations, China's games companies are increasingly looking to overseas markets to grow their business, and revenue in this aspect has grown, rising 6.16 percent to nearly $9 billion over the period.
Beijing's crackdown on its games sector were part of a wider move against the technology and property sectors, with the government seeking to control their growth and to increase its influence over the economy and people's lives. But as China faces economic slowdowns partly caused by pandemic-related lockdowns, the government could be starting to shift its attitudes as it seeks to increase economic output.
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