Overview of Global and China’s Games Markets – 2023
Overview of Global and China's Games Markets - 2023
By LangLink Karolina
With 2023 behind us, we are embracing the fresh start of 2024. For 2023, the gaming industry has seen some major changes and trends in global and China’s markets, and there are new market outlooks and predictions on the industry’s development in 2024. In this blog, we will look back on the global and China’s games markets in 2023 and explore their future trends.
First, let’s look at the global games market. According to the Global Games Market Report 2023 by Newzoo, the global player population continues to grow in 2023, totaling 3,305 million with a 4.3% increase year on year. The growth is primarily attributed to mobile players, but new players across various platforms also contribute their shares. The player base is expected to further expand as new generations come to age, while game-adapted movies and TV shows help turn viewers into players, contributing to a rising player population. It’s estimated that by 2026, the number of global players will reach 3,675 million, with a 5-year compound annual growth rate (CAGR) of 3.7%.
In geographic terms, the player population is on the rise across all 5 regions globally. Asia-Pacific holds the largest share, accounting for over 50% of players worldwide. Meanwhile, Middle East & Africa and Latin America are experiencing the fastest growth in their player bases, with increases of 11.3% and 6%, respectively, from the previous year. This rapid growth can be attributed to several factors, including improving Internet infrastructure, greater Internet accessibility, the rise of the middle class, the widespread adoption of the free-to-play model, and a growing number of mobile users.
Having examined the latest statistics of global players, let’s take a look at the global games revenues. After a period of decline in 2022 – marking the first downturn in recent years – the global games market has begun to show signs of recovery in 2023. Though macroeconomic challenges still existed, the global games revenues reached $184 billion, representing a modest year-on-year growth of 0.6%. The increase, while not very significant, is nonetheless a positive signal, according to Newzoo.
Despite the optimistic signs of revenue growth in 2023, Newzoo‘s latest projections introduce a note of caution regarding the future of the global gaming industry. In the Global Games Market Report 2022, Newzoo forecasted global game revenues to reach $206.4 billion by 2025, with a 5-year CAGR of 2.9%. However, the latest Global Games Market Report 2023 revises these expectations, predicting global revenues of $205.4 billion by 2026, alongside a more modest 5-year CAGR of 1.3%. This adjustment suggests that Newzoo has actually lowered its forecast for the future, indicating that the global gaming industry is still under some pressure, despite the encouraging message from the revenue growth in 2023.
The challenges facing mobile games are likely among the reasons that turned Newzoo‘s estimations more conservative. In 2023, mobile games saw a 1.4% revenue decline due to significant hurdles in monetization and user acquisition. These challenges stem largely from updated privacy policies by Google and Apple, and the impact is expected to persist until 2026. Nonetheless, mobile games generated the highest revenues among all segments, accounting for nearly half of the total. In contrast, both console and PC games reversed their declining trends and recorded revenue increases in 2023. The console segment achieved a 1.7% growth in revenues, thanks to the release of many heavy-hitting titles in 2023. The PC segment, although not enjoying the same benefit of first-party titles as console, benefited from numerous third-party titles and livestreaming services, generating $40.4 billion of revenues in 2023, marking a 5.3% growth – the highest rate among all segments. However, not all segments fared well. The browser PC segment continued its downward trajectory, with a 16.9% revenue decline.
From a geographical perspective, Asia-Pacific, North America, and Europe remain the top 3 regions in gaming consumption, with $84.1 billion, $50.6 billion, and $33.6 billion spent on games respectively. The United States and China remain the top 2 countries, spending $47.3 billion and $43.6 billion respectively. With the exception of the Asia-Pacific, which experienced a slight revenue decrease of 0.8%, all other regions saw their revenues go up. The fastest growth occurred in Middle East & Africa and Latin America, indicating a promising outlook for their gaming industries. In recent years, demands from global game companies for game localization with these two regions as locales have surged, which also reflects the huge potential of these regions and highlights the industry’s keen interest and active investment in emerging markets.
Notably, another industry report presents the market landscape in China differently from Newzoo’s, likely due to different statistical scopes and changing exchange rates. The China’s Gaming Industry Report, released by the Game Work Committee of China Audio-video and Digital Publishing Association (CADPA), provided the following insights into the Chinese Games Market. Let’s take a closer look.
In 2023, China’s player population reached a new historical high of 668 million, a year-on-year increase of 0.61%
In terms of revenues, China’s games market experienced a decline in 2022 but rebounded in 2023, mirroring a trend observed in the global market. In 2023, China’s games market revenues totaled ￥302.964 billion, exceeding the ￥300 billion mark for the first time with a year-on-year increase of 13.95%. The record-high revenues that reversed the downslope trend can be mainly attributed to 3 factors: First, the willingness and ability of consumers to spend on games rallied. Second, the market saw the intensive launch of new titles, including several hits, which along with long-standing popular titles, have fueled revenue growth. Third, the wide adoption of a cross-platform release strategy has significantly contributed to revenue growth.
In 2023, China’s homegrown games generated ￥256.375 billion in revenues within the domestic market, a year-on-year increase of 15.29%.
In overseas markets, the sales revenues of China’s homegrown games reached $16.366 billion, exceeding ￥100 billion for the fourth consecutive year. But the figure is, in fact, a 5.65% decline year-on-year. With international tensions and unrest, fierce market competition, and changes in privacy policies, Chinese games are facing greater challenges and higher operation costs in markets overseas.
In the revenue distribution of the 100 highest-grossing mobile games in China, RPGs command the largest share, followed by MOBAs and shooting games. In contrast, the share of strategy games has notably diminished.
However, when it comes to the global stage, the scenario shifts dramatically. Strategy games not only remained the most favored among Chinese games that have gone overseas, but their proportion has also increased compared to 2022, reaching 40.31%. This is a sharp contrast to the genre preferences observed in China’s domestic game market.
In this brief report, we present a quick sketch of the global and China’s games markets in 2023. The statistics cited herein mainly come from the reports on global and China’s gaming industries and markets released by Newzoo and the Game Work Committee of CADPA. We would like to give our sincere thanks to the two organizations.
After experiencing a downturn in 2022, both the global gaming market and China’s sector have shown encouraging signs of recovery throughout 2023. This positive shift occurs despite numerous challenges, including the volatile global economic climate, geopolitical tensions, and evolving privacy regulations. We maintain a positive outlook on the gaming industry’s trajectory. Our optimism is fueled by the resilience demonstrated by the market in 2023 and the potential for transformative growth through AI and other emerging technologies which promise to usher in a new era for gaming. As we look toward the future, we are excited about the possibilities that lie ahead for the global gaming industry. We believe that the sector’s ongoing recovery and the integration of cutting-edge technologies will continue to drive growth, expand audiences, and redefine entertainment.
Reference:
- Newzoo, Newzoo’s Global Games Market Report 2023 Free Version (https://newzoo.com/resources/trend-reports/newzoo-global-games-market-report-2023-free-version)
- Newzoo, Newzoo’s games market revenue estimates and forecasts by region and segment for 2023 (https://newzoo.com/resources/blog/games-market-estimates-and-forecasts-2023)
- The Game Work Committee of China Audio-video and Digital Publishing Association (CADPA), 2023 China’s Gaming Industry Report (https://mp.weixin.qq.com/s/HLiFH9Se_cmubTJf03Zy6g)
