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China Videogame Sector Reports First-Ever Drop in Revenue

The report also shows that the number of video-game players nationwide fell for the first time, dropping to 665.7 million from 666.6 million reported in December. File photo: Reuters.

China’s videogame sector revenue has recorded its first decline amid a regulatory crackdown.

Combined revenue fell 1.8% to 147.7 billion yuan ($21.8 billion) in the six months ended June 30, China Audio-Video and Digital Publishing Association data showed.

It was the first drop recorded since the data was first compiled 14 years ago.

The decline reflects how China’s massive gaming industry, once marked by unbridled growth, has been heavily bruised by Beijing’s efforts to tighten its oversight of the sector.

Beijing has reduced the number of gaming licences given out and limited the playing time for children and teenagers under 18.

The report also shows that the number of videogame players nationwide fell for the first time, dropping to 665.69 million from 666.57 million reported in December.

Chinese gaming companies’ domestic revenue fell 4.25% to 124.5 billion yuan.

With heavy regulations at home, companies have been turning to overseas markets for growth, where revenue rose 6.16% to nearly $9 billion in the period.

China froze approvals of new videogames for nearly nine months before resuming them in April. However, industry giants including Tencent Holdings and NetEase have yet to win any new licences.

China’s moves against the gaming industry are part of a wider regulatory crackdown across broad swathes of its economy, from property to technology.

Reuters, with additional editing by George Russell

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.