Chinese game market loses profits for 3 consecutive months, double punch of regulation and sluggish consumption

The findings show that the Chinese gaming industry is facing a decline in revenue for the third straight month. It is reported that the background of the struggle of game companies in the country is opaque regulations, economic slowdown, and a decrease in consumer spending affected by the pandemic.

Chinese video gaming revenue falls in May, a third month of decline amid slowing economy and less player spending | South China Morning Post
https://www.scmp.com/tech/big-tech/article/3182784/chinese-video-gaming-revenue-falls-may-third-month-decline-amid

According to a report released by market research company Gamma Data on June 22, 2022, the revenue of the Chinese game industry in May 2022 decreased by 6.7% from the same month of the previous year and decreased by 0.31% from the previous month to 22.9 billion yuan (about). It was 460 billion yen). The decrease in mobile games was particularly remarkable, with a decrease of 10.85% compared to May 2021 and a decrease of 2.15% from April to 16.6 billion yuan (about 330 billion yen).

In a report, Gamma Data points out that in 2022, the number of blockbuster titles has decreased from the previous year, and the performance of newly released mobile games is particularly poor. One of the reasons why Chinese games aren't working is regulation by the Chinese government.

In 2021, the Chinese government created a regulation to limit the playing time of minors and suspended the issuance of game licenses for a long time. A large number of game companies have gone bankrupt in China due to the inability to release new games.

14,000 companies go bankrupt in just 5 months due to suspension of game license issuance by Chinese government-GIGAZINE

To add to this situation, the strict Zero-COVID policy has hit the economy directly, and consumer demand has been slumping significantly. According to the announcement by the National Bureau of Statistics of China, retail sales in April fell sharply to 11.1% year-on-year, and did not move to 6.7% in May.

Owen Soh, founder of Eastlab Consulting, a gaming consultancy, said, 'Slowing growth in technology and severance in a wide range of areas could be a factor in reducing spending on games.' Did.

Due to the worsening situation in Japan, some companies are looking overseas, but the situation is still severe overseas. According to Gamma Data, Chinese game companies earned $ 1.45 billion from overseas in May, down 5.8% from April. In particular, the mobile game market is sluggish globally, and market research firm Sensor Tower said in its June 2022 monthly report , 'The global mobile game market estimates revenue from the App Store and Google Play as a whole in May. It was 6.8 billion dollars (about 916 billion yen), a decrease of 8% from the previous year. '