China is considered a significant participant in global processes. It is often said that this country has achieved an "economic and technological miracle," leading to the emergence of rapidly growing industries such as game development, technology, and e-commerce. Despite the barriers imposed by the authorities, China is considered the home of the largest studios, a huge number of gamers, and numerous esports disciplines.
Let's delve into history.
After Mao Zedong's death, Deng Xiaoping became the chairman of the republic. Believing that the country had been stagnant for too long and needed a push, he implemented a series of reforms. He deviated from a literal interpretation of socialist ideas and placed maximum emphasis on the development of the country's economy, including individual entrepreneurship and private property. In addition, the goal was to make China a full participant in the global market by attracting foreign capital and utilizing technologies, tools, and business practices.
In the early 1980s, the first shipments of Japanese game consoles arrived. It was a novelty for China at that time. Due to the inefficiency of copyright legislation and high import duties, alternative pirated copies of devices started to be produced in China. Almost all devices were copied, and often, copies made from copies of the original product could be seen.
However, like anything new, society had a hard time accepting video games. Many were captivated by the "virtual reality" they offered. Misunderstandings grew between the older and younger generations, and teenagers started neglecting their studies. Some even spent large sums of money near arcade machines.
All of this led the government to intervene and try to solve this problem. From 2000 to 2015, there were restrictions on the import, sale, and production of consoles. The exceptions were the Sony PlayStation 2 and Nintendo, which were produced by Que, Ltd., a local company specializing in video game localization and support. When the ban was lifted, the market saw the introduction of PlayStation 4, Xbox One, and Nintendo Switch.
All of the above did not apply to PCs, making this niche a monopoly in the industry. Internet cafes were popular among youth and gamers, especially in major cities. They provided access to online projects such as "Legend of Mir," "Fantasy Westward Journey," "World of Warcraft," shooters like "Counter-Strike," "CrossFire," and many others. These establishments were a place where gamers could gather to compete, socialize, and enjoy the gaming experience.
In 2009, some relaxation occurred, allowing the operation of arcade machines, but with restrictions for minors. Various fighting games and illegal versions of popular mobile games like "Angry Birds" gained popularity on these machines.
Currently, government moderation is still quite strict. Battlefield 4 was banned because it portrayed China in a negative light. Due to the prohibition of violent scenes, zombies were not allowed in "Call of Duty Online," and the developers changed their models to cyborgs. In "World of Warcraft," mob corpses were replaced with graves, and chunks of flesh were changed to loaves of bread. Characters that showed bones were covered with skin.
In addition to this, it is not acceptable to use characters whose appearance resembles traditional clothing of various Asian cultures. According to regulatory bodies, this could humiliate the local population. There is also an unofficial ban on "monsters." Developers are asked to create visually positive characters.
Besides moderating in-game content, authorities have imposed other restrictions. In recent years, limitations have been imposed on children and teenagers, such as a limit on the number of hours spent online, prohibiting gaming on certain days of the week, and restricting spending more than 200 yuan per month on games. According to the Chairman of China, Xi Jinping, such leisure activities negatively impact young players with fragile mental health.
Despite all of this, the industry has gradually developed. Due to the popularity of internet cafes, market leaders began to focus on F2P MMOs. Games like Lineage, Dota 2, and World of Warcraft were already highly regarded by gamers, so the success of new projects was inevitable. The rise of social networks led to the popularization of games like Happy Farm, laying the groundwork for the future of mobile gaming.
Esports
The government actively invests in the development of esports infrastructure. It supports the construction of arenas and training centers, the creation of specialized schools and university programs. The state also funds the creation and development of professional teams and organizations. There are around 5,000 professional players in the country, and approximately 250 million Chinese people follow various esports disciplines. The favorites among them are League of Legends, Dota 2, PUBG, and Hearthstone.
China actively supports and promotes esports culture. It facilitates the organization and hosting of international and national events, including tournaments and exhibitions. Esports was added as a competition category in the 2022 Asian Games. The state also sponsors the development and release of esports software.
However, the same restrictions we mentioned earlier remain a negative factor. Esports is a very young sport, with an average age of athletes around 18-20 years. To reach a professional level by that time, frequent training from an early age is necessary, which contradicts the state's policies. Some believe that this fact may hinder China's ability to maintain leadership in this discipline.
Industry in 2023
China's population is 1.4 billion people, and about half of them are interested in video games. This is comparable to the entire population of Europe. Additionally, the country is currently experiencing rapid economic growth. Just 20 years ago, half of the population lived in poverty, but now that figure has been reduced to a few percent. All of this makes China the largest market on the planet. According to data from 2022, the total revenue of game development studios reached $47 billion.
Mobile gaming dominates in China with 640 million users. PC gamers come in second with 322 million, while console enthusiasts are a modest 18 million. Almost all people under the age of 24 (97%) play games, 80% of them watch streams, 70% are interested in esports, and 18% spend 30 or more hours online per week.
The government follows a policy of supporting local studios. Last year, out of 486 approved projects, only 44 were foreign. To enter this market, it is necessary to meet all censorship requirements and local regulations, provide complete product localization, and integrate an in-game time counter.
Key Players
Shenzhen Tencent Tianyou Technology Ltd
Tencent Games is considered the industry leader. It is also the owner or investor in several other well-known companies, including Riot Games (creator of League of Legends), Supercell (developer of Clash of Clans), and Epic Games (creator of Fortnite). Under the guidance of this giant corporation, there are various music services, advertising agencies, and software developers.
They also actively collaborate with other developers and publishers worldwide. Their creation, "Honor of Kings" (or "Arena of Valor"), is one of the most famous multiplayer online games in the MOBA genre and has been breaking revenue records for several years. They have also developed and published mobile versions of "PUBG Mobile" and "Call of Duty Mobile."
NetEase
Another major player aiming for global recognition. They develop and release a large number of popular projects, including "Fantasy Westward Journey," "Identity V," and "Knives Out." Previously, NetEase had a partnership with Blizzard Entertainment and released localized versions of "World of Warcraft" and "Overwatch." However, in early 2023, the corporations terminated the agreement and shut down all servers, except for Diablo Immortal.
Babybus
Founded in 2009, this company specializes in developing educational mobile games for preschool children. They help children learn various skills and understand the world around them. Babybus focuses on safety, quality, and children's development through interactive and entertaining game scenarios that incorporate educational elements such as logical thinking training, color, shape, alphabet, and number learning. Their products are successful both domestically and internationally due to their approach to children's education and entertainment. Last year, their apps were downloaded over 800 million times, ranking them 8th in the world's most downloaded apps.
MiHoYo Games
This company specializes in developing and publishing products for mobile devices and PC. They are known for their high-quality titles with beautiful graphics, engaging gameplay, and deep storytelling.
One of their most successful and profitable projects is "Genshin Impact," which has received high praise from players. They have also released "Honkai Impact 3rd" and the new "Honkai: Star Rail," which is rapidly gaining popularity.
Since late 2021, MiHoYo Games has transferred publishing responsibilities to Singaporean company COGNOSPHERE PTE. LTD. This move was made to bypass state censorship. The company continues to attract players' attention worldwide and actively expands both domestically and internationally.
