China's games market sees first decline since records began

China's games market sees first decline since records began

The Chinese games market has shrunk in size for the first time since data has been available.

That's according a new report from "semi-official" trade body, the Game Publishing Committee of the China Audio-Video and Digital Publishing Association – spotted by the South China Morning Post – which claims that the number of people playing games in the country for the first half of 2022 had fallen to 665.69 million from the 666.57 million reported in December 2021.

Domestic revenue dipped by 4.25 per cent year-on-year, a notable decline on the 8.3 per cent increase that China's games market saw during the first half of 2021. It's also well below the 30.4 per cent for H1 2020, though that's an unfair comparison due to the COVID-19 coronavirus pandemic and its subsequent lockdowns.

Chinese companies saw $9 billion in overseas revenue from their games, an increase of 6.2 per cent year-on-year. The report notes that this is a significant decline from just a few years ago.

This is the first time that China's games market has seen a dip since records became official in 2008. 

The director of the gaming committee Zhang Yijun, said that with a shrinking number of players in China meant that companies were better off looking for revenue abroad.

“Because of the overall downturn of the market … overseas businesses have become a breakthrough segment for domestic game development,” Zhang said.

“However, due to the cost increase in growing overseas traffic and the strengthening of international trade barriers, the growth rate in overseas markets is slowing down compared with the same period last year.”

One reason for a decline in the number of people playing games in China is the crackdown on tech and games companies in the country. There have been increased regulations and restrictions on how much time young people can spend playing games, as well as tighter rules on what is approved for release in China.

This is likely a reason why companies like NetEase are starting to invest more in games studios outside of China.

PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for, VGC, Games London, The Observer/Guardian and Esquire UK.