China’s Gaming Market Records Strong Growth During Coronavirus Lockdown

China’s video game market saw substantial growth during the first quarter of 2020, with revenue growing 29.7% year on year as people were required to stay at home to prevent the spread of COVID-19, a report from China’s Game Publishing Commission (GPC) and research firm IDC said.

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Despite a stagnant user base, which only grew 0.3% in Q1 2020 to 654 million compared to the previous quarter, revenue of the Chinese gaming market jumped 25.2% quarter on quarter to reach RMB 73.20 billion (around $10.34 billion), with over 85% coming from titles developed by Chinese companies.

Mobile games remained the top contributor to the market’s total revenue of the first quarter, accounting for more than three-quarters of the revenue of the period. Mobile titles’ strong revenue growth in the first three months of 2020, which increased by 46.2% year on year and 37.6% quarter on quarter, also offset the shrinking revenue from other market segments, such as PC client games and HTML5 games.

However, industry giants and their titles continued to dominate the scene. Eight of the 10 highest-grossing titles for the first three months of 2020 were from Tencent and NetEase. Titles from smaller developers, in the meantime, saw no substantial growth, the report said.

Overseas revenue for the period also increased 31.2% to reach $3.78 billion. Players in the US, Japan, and South Korea contributed 29.8%, 23.4% and 14.4% to the total, respectively.

Among different game genres, esports games witnessed the most significant revenue growth, which rocketed 71.7% year on year and 67.3% quarter on quarter in Q1 2020 to RMB 39.10 billion, driven primarily by increased daily active users from major esports titles such as Tencent’s Peacekeeper Elite and Honour of Kings.

The GPC report also highlighted the surging spending power of female users and the rise of anime-themed games. Female users’ spending in the first quarter of 2020 hiked close to 50% both year on year and quarter on quarter to RMB 19.2 billion. During the same period, anime-themed games also gained traction, with revenue increasing by 49.1% year on year to RMB 7.62 billion.

The increased demand for indoor entertainment created by lockdown or stay-at-home orders has been felt around the globe. Online digital game distribution platform Steam, for instance, recorded more than 22 million concurrent players on March 22.