What's driving growth in the Chinese video game industry?
The Chinese game industry has grown immensely in the past few years. Online free-to-play titles, such as Genshin Impact and Wuthering Waves, have millions of players around the world, while others like Etheria: Restart gear up for their full release. Companies have also marveled at the success of Black Myth: Wukong, which sold 10 million copies in under a week when it launched in August 2024, and subsequently honored as Game of the Year at the 2024 Steam Awards.Indeed, game studios in China are firing on all cylinders, with multiple offerings vying to become the next big global hit. This is further bolstered by rising incomes among consumers, high enthusiasm among developers, and robust support from regional governments. This raises the questions—what's driving growth in the region, and where is this emerging industry headed next?To learn more about the inner workings of the Chinese games industry, Game Developer spoke with several experts like China Independent Game Alliancefounder Simon Zhu, Li Shen, former Tencent Games China and Epic Games China chief technology officer, and Siyuan Xia, the co-founder of Chengdu-based Leenzee Technology and director of soulslike action-roleplaying game Wuchang: Fallen Feathers.Single-player game development is becoming sustainable in ChinaRelated:Chinese developers have historically been reluctant to work on single-player games. The challenges of premium single-player production are immense, and the popularity of free-to-play titles makes those kinds of games a better business prospect. Zhu gave us a brief history lesson on how free-to-play offerings became the norm for many decades. "If you recall, 1995 was a landmark year that saw the birth of The Legend of Sword and Fairy series," notes Zhu. The franchise, which combined elements of Chinese mythology and wuxia, was a huge hit for nearly a decade."Unfortunately, even with the series' popularity, piracy was so rampant back then that the single-player market could not truly flourish. It wasn't until the online game boom in the 2000s that China's video games market and history truly began—which was then dominated by free-to-play games. We had to wait until March 2015 when the PlayStation officially entered the Chinese market for single-player console games to be formally introduced to gamers. Even then, single-player games still occupied a small niche until Steam's emergence significantly expanded access."Studios and publishers also have to contend with the disparity in gauging the success of a single-player title compared to a free-to-play offering. "The fate of the former is often determined on launch day——while the latter has more room for recovery if issues arise on the first day," Xia tells us. It all boils down to how each team adapts, just as how the Wuchang team had adjusted to a new development cycle to make the overall rhythm and work process more manageable.Related:Image via Lenzee/505 Games.Experts are indeed well aware of the opportunities brought about by breakthrough titles opening doors to a wider audience, though these are uncharted waters for many studios in the country.Shenalso adds that Chinese players and developers have always had interest in single-player games, but it wasn't until Black Myth: Wukong sold millions of units globally that publishers became more willing to invest.Other single-player offerings, such as S-Game's Phantom Blade: Zero and Leenzee's Wuchang: Fallen Feathers, also hope to capitalize on Black Myth: Wukong's success. Wuchang, while set during the fall of the Ming Dynasty, even shows a glimpse into the culture and history of the Bronze Age Ancient Kingdom of Shu given that the studio is just an hour away from the archaeological site of Sanxingdui.Related:Wuchang and other games wear their cultural identity proudly on their sleeves, and Xia emphasizes its importance. "I believe Chinese games are gradually forming a distinctive identity in global markets. Cultural outreach isn't an overnight phenomenon but a long-term evolution fueled by collective efforts. For our part, we aspire to contribute foundational work through our endeavors.Shen echoes this sentiment as well. "Black Myth: Wukong was hailed as 'China's first AAA breakthrough' and I believe this instilled pride not just in the developers, but across the industry as well. Many view their work as challenging the Western-dominated games landscape and elevating Asian cultural representation. This collective mission drives innovation and a deeper exploration of local/regional narratives."That said, there's also a balancing act between highlighting cultural uniqueness and navigating geopolitical sensitivities, as Shen points out. "Look at Phantom Blade: Zero, for instance," says Shen. "It garnered nine million views on Bilibili, but it required rebranding for Western audiences."Challenges and opportunities in a fluctuating marketThe experts we spoke with agreed that Chinese game developers benefit from unique comparative advantages—and struggle with some disadvantages. "Chinese companies, owing to their experience in making online free-to-play games, are global frontrunners in commercial design and operations, excelling at creating monetization models, balancing numerical values, and guiding user behavior," says Zhu. "Sadly, game design and overall quality may fall short, particularly in narrative and script writing. The industry still suffers from limited experience in game design, insufficient market insight, and inadequate industry exchange."Shen agrees that China has achieved world-class capabilities, particularly when it comes to mobile game platforms and substantially profitable products in the domestic market. "Unfortunately, increasing production costs and market competition raise the barrier to entry for commercial games," says Shen. "This has made some developers grow increasingly conservative in genre selection, prioritizing production polish over innovative differentiation."Zhu also shares the stark differences between Western and Chinese industries, particularly when holding events and expos. "To give you an example: The Game Developers Conferencein the United States has long been established as a key platform for industry exchanges and B2B meetings. The event hosts approximately 1,000 sessions, with an access pass that costs around 10,000 RMB, yet it manages to draw attendees from across the globe, fostering an excellent environment for communication and networking.""In contrast, the events I organize in China offer tickets at about 500 RMB, which already includes a one-day access to the WePlay Expo. Despite this, we still face challenges in ticket sales and in engaging local speakers, some of whom are hesitant to share their expertise. I believe that this is due to the general public's understanding of the games industry and culture, especially since China's video game history and cultural integration only span around 20 years. The disparity with overseas markets is notable, but it also indicates substantial growth potential."Crunch culture, too, remains a controversial topic in China. "Long hours are common especially during project deadlines," says Shen. "Some studios adopt a 9-9-6 schedule–i.e. 9 a.m. to 9 p.m., six days a week. While labor reforms are underway, intense competition and a culture of 'dedication'tend to normalize overtime as well."Image via CIGA.While government guidelines do exist, enforcement remains inconsistent as it depends on each company or organization. "Our company, Leenzee, does not encourage overtime since we view that as inefficient and counterproductive," notes Xia. "In spite of this, some team members still voluntarily stay late. For them, Wuchang is the first Chinese-developed single-player game that they've worked on, and there's an emotional attachment to it.""In CIGA, we have consistently eschewed the practice of crunch or overtime, even going so far as to avoid rigid clock-in/clock-out times," explains Zhu. "The reality is that crunch, feeling compelled to stay until the boss leaves, or project pressures that lead to mandated overtime—these are all outdated formalities. They do not enhance inefficiency or quality. Instead, they only lead to increased stress and dissatisfaction among team members. Knowing how much the younger generation values work-life balance, I'm optimistic that outdated practices wane as the attitudes of newer generations continue to shift and the work environment evolves."In a period of growth for Chinese game development, one might think there were fewer layoffs going around. That's not true, says Zhu. "I'm based in Shanghai, the city that's at the forefront of the industry," he says. "In the last two years, numerous companies have experienced layoffs, including the termination of entire projects, teams, or subsidiaries. The approach differs from company to company, with some offering compensation to affected employees."Shen points out that unlike many other game development communities, China benefits from a strong social safety net reinforced by unemployment insurance and state-backed retraining programs. "Though specifics depend on regional policies," he clarified, noting it's not a perfect solution.Local governments are investing in game developmentRegional policies that often play a huge role in supporting game development in China. Most games that are set to be published in the country require a license from the National Press and Publication Administration, with key steps that include content reviewand technical compliance. However, each regional administrative district may have additional programs in place to aid companies and studios."The Sichuan Provincial Government has been highly supportive of our work," says Xia. "Since Wuchang: Fallen Feathers takes place in Chengdu and parts of Sichuan Province, the government even helped us locate more cultural heritage locations available for digital preservation through our scanning process.""Depending on the regional policies, the initiatives might include tax breaks for cultural projects or grants for technology/R&D," adds Shen. "Also, games recognized as key to 'digital cultural industries' have mandates to integrate traditional themes, and there might even be state-backed campaigns to export games globally as cultural ambassadors."Zhu, meanwhile, gestured to the 'tech park' we were in, one of several in the city that was built by Shanghai's administrative government. "This entire complex is home to several tech companies, both large conglomerates and startups, and most only pay a small expense for rent," says Zhu. Zhu also adds that local governments across the country have policies that help address game incubation, operations, local releases, and international distribution.There's no denying that China is the largest video games market in the world. While challenges, such as a lack of experience in making single-player games and a reluctance to risk on day-one launch revenue, do exist, experts remain hopeful. Developers, project leads, experts, and the government all contribute toward a collective effort to drive the expansion and global reach of the Chinese games industry."Rising incomes and increased demand for high-quality content will continue to drive growth," says Shen, arguing that there's a brighter future ahead.Zhu, meanwhile, remains steadfast in CIGA's support of the indie games community. "We know that the development of this sector in the country remains a long-term endeavor," notes Zhu. "Transformative change may not be achieved within a single lifetime, but this undertaking demands continued dedication and resilience.""We have a saying in China: 'When everybody adds fuel, the flames rise high'—it's the equivalent of saying that 'there is strength in numbers,'" posits Xia. "Our team hopes that, through our efforts, we can contribute further to the games industry, making it easier for future creators and allowing for more interesting works to emerge."
#what039s #driving #growth #chinese #video
What's driving growth in the Chinese video game industry?
The Chinese game industry has grown immensely in the past few years. Online free-to-play titles, such as Genshin Impact and Wuthering Waves, have millions of players around the world, while others like Etheria: Restart gear up for their full release. Companies have also marveled at the success of Black Myth: Wukong, which sold 10 million copies in under a week when it launched in August 2024, and subsequently honored as Game of the Year at the 2024 Steam Awards.Indeed, game studios in China are firing on all cylinders, with multiple offerings vying to become the next big global hit. This is further bolstered by rising incomes among consumers, high enthusiasm among developers, and robust support from regional governments. This raises the questions—what's driving growth in the region, and where is this emerging industry headed next?To learn more about the inner workings of the Chinese games industry, Game Developer spoke with several experts like China Independent Game Alliancefounder Simon Zhu, Li Shen, former Tencent Games China and Epic Games China chief technology officer, and Siyuan Xia, the co-founder of Chengdu-based Leenzee Technology and director of soulslike action-roleplaying game Wuchang: Fallen Feathers.Single-player game development is becoming sustainable in ChinaRelated:Chinese developers have historically been reluctant to work on single-player games. The challenges of premium single-player production are immense, and the popularity of free-to-play titles makes those kinds of games a better business prospect. Zhu gave us a brief history lesson on how free-to-play offerings became the norm for many decades. "If you recall, 1995 was a landmark year that saw the birth of The Legend of Sword and Fairy series," notes Zhu. The franchise, which combined elements of Chinese mythology and wuxia, was a huge hit for nearly a decade."Unfortunately, even with the series' popularity, piracy was so rampant back then that the single-player market could not truly flourish. It wasn't until the online game boom in the 2000s that China's video games market and history truly began—which was then dominated by free-to-play games. We had to wait until March 2015 when the PlayStation officially entered the Chinese market for single-player console games to be formally introduced to gamers. Even then, single-player games still occupied a small niche until Steam's emergence significantly expanded access."Studios and publishers also have to contend with the disparity in gauging the success of a single-player title compared to a free-to-play offering. "The fate of the former is often determined on launch day——while the latter has more room for recovery if issues arise on the first day," Xia tells us. It all boils down to how each team adapts, just as how the Wuchang team had adjusted to a new development cycle to make the overall rhythm and work process more manageable.Related:Image via Lenzee/505 Games.Experts are indeed well aware of the opportunities brought about by breakthrough titles opening doors to a wider audience, though these are uncharted waters for many studios in the country.Shenalso adds that Chinese players and developers have always had interest in single-player games, but it wasn't until Black Myth: Wukong sold millions of units globally that publishers became more willing to invest.Other single-player offerings, such as S-Game's Phantom Blade: Zero and Leenzee's Wuchang: Fallen Feathers, also hope to capitalize on Black Myth: Wukong's success. Wuchang, while set during the fall of the Ming Dynasty, even shows a glimpse into the culture and history of the Bronze Age Ancient Kingdom of Shu given that the studio is just an hour away from the archaeological site of Sanxingdui.Related:Wuchang and other games wear their cultural identity proudly on their sleeves, and Xia emphasizes its importance. "I believe Chinese games are gradually forming a distinctive identity in global markets. Cultural outreach isn't an overnight phenomenon but a long-term evolution fueled by collective efforts. For our part, we aspire to contribute foundational work through our endeavors.Shen echoes this sentiment as well. "Black Myth: Wukong was hailed as 'China's first AAA breakthrough' and I believe this instilled pride not just in the developers, but across the industry as well. Many view their work as challenging the Western-dominated games landscape and elevating Asian cultural representation. This collective mission drives innovation and a deeper exploration of local/regional narratives."That said, there's also a balancing act between highlighting cultural uniqueness and navigating geopolitical sensitivities, as Shen points out. "Look at Phantom Blade: Zero, for instance," says Shen. "It garnered nine million views on Bilibili, but it required rebranding for Western audiences."Challenges and opportunities in a fluctuating marketThe experts we spoke with agreed that Chinese game developers benefit from unique comparative advantages—and struggle with some disadvantages. "Chinese companies, owing to their experience in making online free-to-play games, are global frontrunners in commercial design and operations, excelling at creating monetization models, balancing numerical values, and guiding user behavior," says Zhu. "Sadly, game design and overall quality may fall short, particularly in narrative and script writing. The industry still suffers from limited experience in game design, insufficient market insight, and inadequate industry exchange."Shen agrees that China has achieved world-class capabilities, particularly when it comes to mobile game platforms and substantially profitable products in the domestic market. "Unfortunately, increasing production costs and market competition raise the barrier to entry for commercial games," says Shen. "This has made some developers grow increasingly conservative in genre selection, prioritizing production polish over innovative differentiation."Zhu also shares the stark differences between Western and Chinese industries, particularly when holding events and expos. "To give you an example: The Game Developers Conferencein the United States has long been established as a key platform for industry exchanges and B2B meetings. The event hosts approximately 1,000 sessions, with an access pass that costs around 10,000 RMB, yet it manages to draw attendees from across the globe, fostering an excellent environment for communication and networking.""In contrast, the events I organize in China offer tickets at about 500 RMB, which already includes a one-day access to the WePlay Expo. Despite this, we still face challenges in ticket sales and in engaging local speakers, some of whom are hesitant to share their expertise. I believe that this is due to the general public's understanding of the games industry and culture, especially since China's video game history and cultural integration only span around 20 years. The disparity with overseas markets is notable, but it also indicates substantial growth potential."Crunch culture, too, remains a controversial topic in China. "Long hours are common especially during project deadlines," says Shen. "Some studios adopt a 9-9-6 schedule–i.e. 9 a.m. to 9 p.m., six days a week. While labor reforms are underway, intense competition and a culture of 'dedication'tend to normalize overtime as well."Image via CIGA.While government guidelines do exist, enforcement remains inconsistent as it depends on each company or organization. "Our company, Leenzee, does not encourage overtime since we view that as inefficient and counterproductive," notes Xia. "In spite of this, some team members still voluntarily stay late. For them, Wuchang is the first Chinese-developed single-player game that they've worked on, and there's an emotional attachment to it.""In CIGA, we have consistently eschewed the practice of crunch or overtime, even going so far as to avoid rigid clock-in/clock-out times," explains Zhu. "The reality is that crunch, feeling compelled to stay until the boss leaves, or project pressures that lead to mandated overtime—these are all outdated formalities. They do not enhance inefficiency or quality. Instead, they only lead to increased stress and dissatisfaction among team members. Knowing how much the younger generation values work-life balance, I'm optimistic that outdated practices wane as the attitudes of newer generations continue to shift and the work environment evolves."In a period of growth for Chinese game development, one might think there were fewer layoffs going around. That's not true, says Zhu. "I'm based in Shanghai, the city that's at the forefront of the industry," he says. "In the last two years, numerous companies have experienced layoffs, including the termination of entire projects, teams, or subsidiaries. The approach differs from company to company, with some offering compensation to affected employees."Shen points out that unlike many other game development communities, China benefits from a strong social safety net reinforced by unemployment insurance and state-backed retraining programs. "Though specifics depend on regional policies," he clarified, noting it's not a perfect solution.Local governments are investing in game developmentRegional policies that often play a huge role in supporting game development in China. Most games that are set to be published in the country require a license from the National Press and Publication Administration, with key steps that include content reviewand technical compliance. However, each regional administrative district may have additional programs in place to aid companies and studios."The Sichuan Provincial Government has been highly supportive of our work," says Xia. "Since Wuchang: Fallen Feathers takes place in Chengdu and parts of Sichuan Province, the government even helped us locate more cultural heritage locations available for digital preservation through our scanning process.""Depending on the regional policies, the initiatives might include tax breaks for cultural projects or grants for technology/R&D," adds Shen. "Also, games recognized as key to 'digital cultural industries' have mandates to integrate traditional themes, and there might even be state-backed campaigns to export games globally as cultural ambassadors."Zhu, meanwhile, gestured to the 'tech park' we were in, one of several in the city that was built by Shanghai's administrative government. "This entire complex is home to several tech companies, both large conglomerates and startups, and most only pay a small expense for rent," says Zhu. Zhu also adds that local governments across the country have policies that help address game incubation, operations, local releases, and international distribution.There's no denying that China is the largest video games market in the world. While challenges, such as a lack of experience in making single-player games and a reluctance to risk on day-one launch revenue, do exist, experts remain hopeful. Developers, project leads, experts, and the government all contribute toward a collective effort to drive the expansion and global reach of the Chinese games industry."Rising incomes and increased demand for high-quality content will continue to drive growth," says Shen, arguing that there's a brighter future ahead.Zhu, meanwhile, remains steadfast in CIGA's support of the indie games community. "We know that the development of this sector in the country remains a long-term endeavor," notes Zhu. "Transformative change may not be achieved within a single lifetime, but this undertaking demands continued dedication and resilience.""We have a saying in China: 'When everybody adds fuel, the flames rise high'—it's the equivalent of saying that 'there is strength in numbers,'" posits Xia. "Our team hopes that, through our efforts, we can contribute further to the games industry, making it easier for future creators and allowing for more interesting works to emerge."
#what039s #driving #growth #chinese #video
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