China’s video game revenue will continue to grow

In 2015, the global video game industry saw total revenue of US$71.27 billion this is expected to increase at a compound annual growth rate (CAGR) of 4.8%. By 2020 the total expected revenue for the global video game industry will be US$90.07 billion, according to PwC’s Global Entertainment and Media Outlook.

The three largest video game markets is the US, Japan and China. In 2015, China’s gaming revenue totaled to US$8.98 billion and this is expected to reach US$12.85 billion by 2020.

This could be due to new breakthroughs in the gaming world such as the expansion of virtual reality and augmented reality. This can be seen in the new gaming craze which is Pokémon Go, which saw a surge in revenues for the mobile gaming sector.

At present, PC games hold the largest sub-segment in China’s video gaming landscape. Reflecting this, there has been an increase in PC games launched as mobile games especially in 2015.

China’s console market experienced a boost in 2015, this was due to regulatory changes which meant that foreign players could manufacture and sell anywhere in the country.

The growth in the app-based gaming sector started to slow down in 2015, with Outlook recording revenue of US$2.61 billion for the sub-sector over the year. In the future, competition in China’s mobile gaming sector will be increasingly contingent on competition of distribution channels.

Commentin on China’s gaming industry, Jianbin Go,PwC China TMT leader said, “One of the positive stories in China has been the rise of video game streaming and e-sports competitions over 2015. Rising popularity of competitions will enhance appeal of both PC and mobile games for gamers in China, leading to a commensurate rise in advertising revenue, while also enlarging the fan economy over the forecast period.”