Chinese video game market faces challenges and uncertainty in 2024
The year 2023 was a challenging one for the Chinese video game market, with regulatory actions and market turbulence impacting the industry. Regulatory measures aimed at curbing excessive consumer spending on in-game items wiped out billions of dollars in market value from Chinese gaming stocks. Lay-offs and closures were also observed in the industry. However, there is some hope for 2024 as industry insiders and executives believe that this consolidation and recalibration could lead to a more stable and sustainable market.
Chinese studios aim for overseas expansion amid regulatory challenges
Despite the challenges in the domestic market, Chinese video game studios are eyeing overseas expansion. Analysts expect Chinese developers to roll out more hit games in 2024, especially in the hybrid casual genres. This presents an opportunity for Chinese studios to tap into the global market and reach a wider audience. However, it remains to be seen whether the content will align with Beijing’s expectations for “excellent” video games that promote socialist values and highlight Chinese culture.
World of Warcraft set to return to China in new deal with NetEase
There is speculation that World of Warcraft, a massively popular game, will make a comeback in the Chinese market. Developer Blizzard Entertainment has struck a new deal with its old partner NetEase, raising hopes for the return of the game. NetEase’s experience from the previous partnership and operational edge could make it an attractive choice for Blizzard. The return of World of Warcraft could help revitalize the Chinese video game market and attract gamers back to the industry.
Chinese video game industry looks to innovating with AR, VR, and AI
Innovation is key for the Chinese video game industry to stay competitive and attract players. Local developers are expected to leverage technologies such as augmented reality (AR), virtual reality (VR), and artificial intelligence (AI) to create more immersive gameplay experiences and make games playable across different platforms. This shift towards innovative technologies could help Chinese studios differentiate themselves in the global market and appeal to a wider audience.
AI tools utilized in Chinese video game development for cost savings
AI tools have become increasingly popular in Chinese video game development, offering cost savings and efficiencies. Developers are using generative AI to modify pictures, generate videos, and dub animated characters. These AI tools can reduce the overall costs of game development by approximately 20%. However, there is a concern that the use of AI could also lead to a decline in entry-level jobs in the industry. While AI offers great assistance, it may also have unintended consequences on employment opportunities.
In conclusion, the Chinese video game market faces challenges and uncertainty in 2024. Regulatory actions, market turbulence, and economic factors have impacted the industry. However, Chinese studios are looking to overcome these challenges by expanding overseas and leveraging innovative technologies such as AR, VR, and AI. The return of World of Warcraft through a new partnership with NetEase could help revitalize the market. Despite the uncertainty, there is optimism that the industry will adapt and continue to grow.
Analyst comment
Positive: Chinese video game studios aim for overseas expansion, presenting an opportunity for growth in the global market. The return of World of Warcraft could revitalize the Chinese video game market.
Negative: Regulatory actions and market turbulence impacted the Chinese video game market in 2023, wiping out market value and leading to layoffs and closures in the industry.
Neutral: The use of AI tools in game development offers cost savings but may also lead to job declines. The industry faces uncertainty, but there is optimism for stability and growth in 2024 through consolidation, innovative technologies, and expansion efforts.
