Despite restrictive new rules, China’s mobile gaming revenue will hit $8.3 billion in 2017

Photo credit: Johan Larsson.

China’s government has made it much harder for game developers to make mobile games, but China’s mobile gamers haven’t become any less interested in playing them. That’s the conclusion reached by research firm Niko Partners in its latest report on China’s mobile gaming industry. According to the report:

The regulations that began in July 2016 will curb supply by slowing the new games into the market and speeding up market consolidation of smaller studios. But the regulations will not curb demand, which is still voracious, for the tens of thousands of games that are currently available to Chinese gamers.

Specifically, Niko projects that mobile gaming revenues in China will grow 28 percent this year, and continue to grow in 2017, reaching US$8.3 billion.

That’s good news for bigger developers, and in particular Tencent, which earns a whopping 53 percent of China’s mobile games revenue. But it will be little comfort to smaller players that have been squeezed and in some cases forced out of business by China’s new mobile gaming rules.

In July, Chinese censorship bureau SAPPRFT announced new rules that require every mobile game launched in China to be pre-approved by SAPPRFT. SAPPRFT has thus far wielded a heavy hand, rejecting games for absurdly minor issues like containing a few English words. The approval process can also be lengthy and difficult to navigate, which makes it harder for small startup and indie developers, who don’t have government connections or legal know-how to actually get their games to market.

Revenue from mobile games is expected to account for 31 percent of all the revenue generated in China’s digital games industry in 2017. (Most of the rest of the revenue comes from PC gaming).