Chinese video game sales decline for the first time ever amid crackdown

China‘s video games sector revenue declined in the first half of 2022 for the first time since the data was made available 14 years ago, as the world’s biggest video games market continues to reel from Beijing‘s tightening oversight.

The industry’s combined revenue declined 1.8 percent to 147.7 billion yuan ($21.8 billion) in the six months ended June, according to a report published by the China Audio-Video and Digital Publishing Association, a state-backed industry group.

It marks the first drop since the data began being published in 2008 and reflects how China’s massive gaming industry, once marked by unbridled growth, has been heavily bruised by Beijing’s efforts to tighten its oversight of the sector, including by reducing the number of gaming licences given out and limiting play time for teens.

The report also shows that the number of gamers nationwide fell for the first time, dropping to 665.69 million from 666.57 million reported in December.

Chinese gaming companies’ domestic revenue fell 4.25 percent to 124.5 billion yuan. With heavy regulations at home, companies have been turning to overseas markets for growth, where revenue rose 6.16 percent to nearly $9 billion in the period.

China froze approvals of new games for nearly nine months before resuming them in April. However, industry giants including Tencent Holdings and NetEase have yet to win any new licences.

China’s moves against the gaming industry are part of a wider regulatory crackdown across broad swathes of its economy, from property to technology.

But authorities have in recent months changed their tone as they seek to boost an economy hurt by COVID-19 containment measures. The shift has raised hope for companies and investors that the worst is over, though jitters remain.

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China‘s video games sector revenue declined in the first half of 2022 for the first time since the data was made available 14 years ago, as the world’s biggest video games market continues to reel from Beijing‘s tightening oversight.

The industry’s combined revenue declined 1.8 percent to 147.7 billion yuan ($21.8 billion) in the six months ended June, according to a report published by the China Audio-Video and Digital Publishing Association, a state-backed industry group.

It marks the first drop since the data began being published in 2008 and reflects how China’s massive gaming industry, once marked by unbridled growth, has been heavily bruised by Beijing’s efforts to tighten its oversight of the sector, including by reducing the number of gaming licences given out and limiting play time for teens.

The report also shows that the number of gamers nationwide fell for the first time, dropping to 665.69 million from 666.57 million reported in December.

Chinese gaming companies’ domestic revenue fell 4.25 percent to 124.5 billion yuan. With heavy regulations at home, companies have been turning to overseas markets for growth, where revenue rose 6.16 percent to nearly $9 billion in the period.

China froze approvals of new games for nearly nine months before resuming them in April. However, industry giants including Tencent Holdings and NetEase have yet to win any new licences.

China’s moves against the gaming industry are part of a wider regulatory crackdown across broad swathes of its economy, from property to technology.

But authorities have in recent months changed their tone as they seek to boost an economy hurt by COVID-19 containment measures. The shift has raised hope for companies and investors that the worst is over, though jitters remain.

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