Chinese gamer spending ‘might contract in the near term because there are no new games’ warns analysts

Market analysts Niko Partners has adjusted its 2018 forecast for China’s gaming industry, dropping its revenue forecast by 3.8 per cent for PC and 2.4 per cent for mobile gaming.

The dip in forecasted revenue (via Gamasutra) comes as developers and publishers in China continue to face increasing challenges with Chinese governmental regulations for the gaming industry. Megacorp Tencent was hit with a recent fall in profits for the first time in 13 years owing to the very same Chinese regulatory issues that have pushed the decision to restructure.

The revised forecast now puts PC game revenue at $15.2 billion, rather than the $15.8 billion predicted, and mobile revenue drops from $16 billion to $15.6 bn in 2018. By 2022, the company predicts PC revenue will stall at $15.4 billion, whilst mobile gaming revenue will hit $24.1 billion.

"China’s 603 million gamers are avidly consuming already-approved games during this ban, hence the increase in revenue," stated the report, but warned that "gamer spending might contract in the near term because there are no new games". It does, however, expect the industry to "recover by late 2019" and games revenue should "rebound by 2020" as Chinese developers "are expected to take a more global approach to games moving forward, leading to higher export revenue".

Tencent also recently announced that it will expand its player identity verification processes across all its games by the end of 2019 after governmental pressure to reduce game addiction, minimise underage players, and curtail short-sightedness. The new legislation, introduced in August, has made it increasingly difficult for Tencent – which, by sales, is the world’s biggest game company – to release new titles or include microtransactions or in-app purchases. Its last release was back in March, pushing its share price down by 28 per cent and reducing the company’s market value by $138 billion.