Niko Partners: China's digital gaming market will reach $33 billion by end of 2019

It’s going to be a good year for China’s two largest gaming companies. For that matter, it’s going to be a good year for all of the country’s digital gaming market.

By the end of 2019, it may reach $33 billion.

This is according to Niko Partners, a gaming consultancy specializing in the Asian market. The firm analyzed the market’s revenue in the first half of the year and made a forecast for the rest of 2019.

According to their report, after the lifting of the game licensing freeze, the Chinese gaming industry is quickly recovering. Since December, 1,240 games have been licensed in China from both local and foreign studios. It is predicted that in 2019 the revenue across PC and mobile will grow by 7.3% year-on-year.

The report focuses on Tencent and NetEase. After all, these giants account for 70% of the gaming revenue in China.

General stats

The total revenue from Tencent and NetEase games for the first six months amounted to $ 11 billion. This is 8.6% more than a year ago.

Over this period, the mobile revenue of both companies grew by 13.4%. The PC revenue, on the contrary, declined by 0.1%.

By the end of the year, the forecast for mobile revenue is positive. It can show growth of 18.3%. The PC revenue will decrease even more, by 4%.

Game for peace

Tencent

In the first half of the year, the company’s gaming income reached $ 7.8 billion, which is 3.4% more than in the same period of 2018.

Tencent did not immediately rebound at home after the licensing freeze was lifted. In the first quarter of the year, it only released one game. But in the second quarter, the company got 14 games licensed and launched 10 new titles.

Tencent had few new PC titles, so the revenue in this segment declined.

One of Tencent’s largest new products is Game for Peace (also known as Peacekeeper Elite). Now its DAU is 50 million players. The game’s revenue has exceeded $600 million since May.

Another new title, Let’s Hunt Monsters, recently broke the $50 million mark.

Onmyoji

NetEase

The gaming revenue in the first half of the year was $ 3.2 billion. Compared to the first half of 2018, there was a 23.7% growth.

Since December, NetEase has received 10 licenses to release games in China.

Unlike Tencent, NetEase is seeing its PC revenue grow. The company keeps launching new games, but most importantly, it’s updating the legacy titles. The latter was the main driver behind the revenue growth.

A significant income is generated in China by the new titles including Invincible, Identity V, Onmyoji. The latter, by the way, was the top grossing title on iOS this year (again, thanks to updates).

Over six months, the company also launched several new games abroad and entered into partnerships with major brands like Marvel and Pokémon.