The Evolution of Video Game Market in China

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The international Video game market has surpassed 100 billion USD and is expected to reach 102.9 billion USD in 2017 according to Daxue Consulting recent report. This increase is mainly due to the development of the Asian countries coupled with the rise of the use of Smartphones. China is indeed predicted to go beyond  the US market in 2017, to become the world’s largest video game market.

This changed is mainly due to the banned for video game consoles and games to enter the Chinese market. Since 2014, Chinese regulations have been cut down this banned, offering the opportunity for foreign companies to sell video game consoles and games in mainland China under the condition of content review and administration requirements such as partnering with a Chinese company operating in the foreign-trade zone.

A New Market Dynamic for Console Game in China

The three main manufacturers that is present worldwide Sony, Microsoft and Nintendo, have the intention to conquer China’s market. To enter the market, they have created a joint venture with Chinese companies. With heavy investment in the Chinese market, they have opted for very specific offers and strategies to meet the market demand. For instance, Nintendo has opted for a more adapted approach in the emerging market in China. The CEO of Nintendo, Tatsumi Kimishima has declared, “We want to make new things, with new thinking rather than a cheaper version of what we currently have, the product and price balance must be made from scratch.”  However, the video game market is also composed of local companies with ambitious plans. Indeed, Android and Huawei plans to be part of the market as well. Thus, the price of the new consoles will be cheaper than the foreign brands’ products.

 

Products Adaptation

 

User experience and community should be developed carefully in China; Indeed, a strong after sales services and presence could avoid and restrain the habit of cracking down video games, mainly due to a very high price of the devices.

 

The Chinese console games are also living a new tendency with the OTT TV box (Over The Top Content). This function enables players to go online and play games from a cloud without buying expensive consoles. A great  opportunity for  the video game industry that will trigger numerous households to purchase this future mass consumption product. 


Amy for Daxue Consulting

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