I’m in the middle of China’s largest gaming conference. This is China Joy.
China’s gaming giants from Tencent to NetEase are all here, as well as international players too.
But it's not just your typical gaming companies here.
You’ve got the likes of e-commerce giant JD.com,
as well as smartphone maker Xiaomi, all looking to get a slice of the gaming pie.
China was the world’s largest gaming market in 2020, generating $44 billion in revenue that year.
The coronavirus outbreak and subsequent lockdowns around the world
meant people who were staying home turned to gaming for entertainment.
That led to nearly $180 billion in revenue for the global games industry in 2020.
The growth is expected to slow after the record year before picking up again,
with issues such as video game production delays
and the global semiconductor shortage affecting console production.
Naturally this year you’re going to see the growth sort of slow down,
a lot of it because last year was so good.
But in the long term, I still think the growth rates should be very, very high.
Gaming has gone from narrowly defined gaming to more broadly, a way of life.
It’s part of the lifestyle. It’s part of the pop culture
because if you look at the future, what we believe is that the future is a mixed reality.
People are not just residing in the physical world. They’re also
creating this virtual identity. They’re also living in this virtual space.
So what’s going to happen is this mixed reality that people live very fluently move from the
physical world into the virtual space, and gaming is an important part of that mixed reality.
Gaming consoles such as Sony’s PlayStation and Microsoft’s
Xbox were banned in China for 14 years up until 2014.
That allowed PC and mobile games to cement their dominance here.
In 2020, mobile games raked in revenue of $29.2 billion in China.
That was the biggest category, way ahead of PC games revenue
and sales from console hardware and software.
Chinese game developers have typically been strong in PC and mobile games.
But a new breed of studio is hoping to crack the lucrative console market.
One of those is Frank Mingbo Li, the CEO of Studio Surgical Scalpels.
The developer is making a game called Boundary for Sony’s PlayStation 4,
PS5 and PC. It’s a first-person shooter set in space.
Since 2014 and 2015, the government raised the bar of the console
game market. There are a lot of game developers wanting to do more console game.
For the global game revenue, 30% is from console gaming,
but in China in 2014, that was zero percentage.
Even today, it’s only one or two percentage. I think that is a huge opportunity.
Another big focus at China Joy is e-sports or competitive gaming.
Like other sports, money is made through prize money, salaries, advertising and sponsorships.
Global e-sports revenues is estimated to grow to over $1 billion in 2021,
up 14.5% year on year. China is expected to be the biggest market.
Shanghai, where China Joy is taking place, is trying to position itself as an e-sports hub.
In 2020, it held the League of Legends world championship
and the city has broken ground on a nearly $900 million e-sports arena.
So, what next for e-sports in China?
We haven’t really seen the true potential of e-sports yet.
I feel like the industry is still in the early stage.
We’re still sort of going from
creating those awesome experiences offline to blending those experiences online.
If you think about what traditional sports are right now for people,
it’s part of their lifestyle, it’s part of their family past-time and that’s what we think e-sports is going to be.
So, there are still a lot of exciting things yet to happen in e-sports.