Page 374 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
billion this year and should reach some US$436.8 in China is predicted to reach 71.8% of overall video
billion in 2025, with the compound annual growth game revenue by 2025, and the revenue share of
rate reaching 5.1%, higher than the global rate China's esports media rights and sponsorships to
of 4.6%, according to a new report from global total esports is estimated to reach 75.1% by 2025
accounting firm PwC. China will lead the world in the domestic market. The growth rate of Chinese
in average revenue growth in segments such mobile games in overseas markets has been
as virtual reality, over-the-top (OTT) video and increasing year by year since 2017. In 2020, the scale
internet advertising, the report said. Experts state of China's overseas gaming market surged 33.25%
that China's entertainment and media industry is year-on-year. The report added that in the future,
recovering faster than the rest of the world. With the the overseas market potential is still huge, and
relaxation of COVID-19 restrictions, films, live music, launching video games overseas will drive revenue
and trade exhibitions will see robust growth in 2021. growth for platform operators (Feifei).
In the next few years, along with the continuous
impact of the COVID-19 pandemic and technological Video Games
innovations, the fierce competition in China's
entertainment and media industry will undergo The revenue of China's cloud gaming market is
tremendous change, adding that the shares of expected to grow at a compound annual rate of
market revenue from virtual reality and OTT video 135% from 2020 to 2023, an industry report has
are expected to continue to grow. In addition, the forecasted. The estimated revenue growth will
rapid development of 5G and the internet of things be significantly higher than the global average of
has propelled the growth of internet advertising. The 101%, making China one of the leading potential
report pointed out that China's internet advertising markets for cloud games, according to the report
revenue will reach approximately US$117.5 billion jointly released by the Tencent research institute
by 2025, with a compound annual growth rate and Newzoo, a global games and esports analytics
of 10.1%. Notably, spending on mobile internet provider. The number of potential cloud game users
advertising is on course to dominate the growth of in China will hit 60.65 million in 2021, and patent
China's internet advertising industry, with its share activity in the cloud gaming sector increased by 81%
of total internet advertising revenue increasing to year on year in 2019, read the report. Most major
66% by 2025. Revenue of China's OTT video market technology companies in overseas markets have
is expected to reach US$17.3 billion in 2025, with entered the field of cloud games, and many smaller
the compound annual growth rate reaching 11.86%, companies have provided B2B and B2C services.
which is faster than the global growth rate, the As the educational, meeting, entertainment and
report said. Media leaders state that consumers social functions of TV have been activated during
are gaining more power as they now watch more the COVID-19 pandemic and recovery period,
content such as new movies, live webcasts, and interactive entertainment in living rooms may
online concerts through OTT video platforms, and provide opportunities for the development of cloud
they are diversifying their consumption scenarios. gaming, the report noted (Xinhua, “China’s Cloud
These changes in consumption behaviors have an Gaming Industry to Grow Fast: Report”).
influence on the entertainment and media industry.
In terms of revenue, China and the United States are The number of China's game users reached 667
still the world's two largest movie markets. China's million in the first half of 2021, up 1.38% year-on-
film revenue is expected to account for 23.5% of year, according to a report released at the China
the world's total movie revenue of US$47 billion in Digital Entertainment Conference, or China Joy,
2025, second only to 24.1% from the US, said PwC. which was held in Shanghai from July 30 to Aug 2.
Furthermore, China is the world's largest video Sales revenue for China's game market hit 150.49
game and esports market, with combined revenue billion RMB (US$23.28 billion) in H1, an increase
reaching US$31.5 billion in 2020. The compound of 7.89% on a yearly basis. That of Chinese-
annual growth rate of video games and esports is developed games was 130.11 billion RMB, up 8.3%
estimated to reach 4.9% and 12.3%, respectively, yearly, claiming more than 80% of sales revenue
from 2021 to 2025, the report said. Meanwhile, the for the whole market, Chinanews.cn reported
revenue share of app-based social and casual games
374
billion this year and should reach some US$436.8 in China is predicted to reach 71.8% of overall video
billion in 2025, with the compound annual growth game revenue by 2025, and the revenue share of
rate reaching 5.1%, higher than the global rate China's esports media rights and sponsorships to
of 4.6%, according to a new report from global total esports is estimated to reach 75.1% by 2025
accounting firm PwC. China will lead the world in the domestic market. The growth rate of Chinese
in average revenue growth in segments such mobile games in overseas markets has been
as virtual reality, over-the-top (OTT) video and increasing year by year since 2017. In 2020, the scale
internet advertising, the report said. Experts state of China's overseas gaming market surged 33.25%
that China's entertainment and media industry is year-on-year. The report added that in the future,
recovering faster than the rest of the world. With the the overseas market potential is still huge, and
relaxation of COVID-19 restrictions, films, live music, launching video games overseas will drive revenue
and trade exhibitions will see robust growth in 2021. growth for platform operators (Feifei).
In the next few years, along with the continuous
impact of the COVID-19 pandemic and technological Video Games
innovations, the fierce competition in China's
entertainment and media industry will undergo The revenue of China's cloud gaming market is
tremendous change, adding that the shares of expected to grow at a compound annual rate of
market revenue from virtual reality and OTT video 135% from 2020 to 2023, an industry report has
are expected to continue to grow. In addition, the forecasted. The estimated revenue growth will
rapid development of 5G and the internet of things be significantly higher than the global average of
has propelled the growth of internet advertising. The 101%, making China one of the leading potential
report pointed out that China's internet advertising markets for cloud games, according to the report
revenue will reach approximately US$117.5 billion jointly released by the Tencent research institute
by 2025, with a compound annual growth rate and Newzoo, a global games and esports analytics
of 10.1%. Notably, spending on mobile internet provider. The number of potential cloud game users
advertising is on course to dominate the growth of in China will hit 60.65 million in 2021, and patent
China's internet advertising industry, with its share activity in the cloud gaming sector increased by 81%
of total internet advertising revenue increasing to year on year in 2019, read the report. Most major
66% by 2025. Revenue of China's OTT video market technology companies in overseas markets have
is expected to reach US$17.3 billion in 2025, with entered the field of cloud games, and many smaller
the compound annual growth rate reaching 11.86%, companies have provided B2B and B2C services.
which is faster than the global growth rate, the As the educational, meeting, entertainment and
report said. Media leaders state that consumers social functions of TV have been activated during
are gaining more power as they now watch more the COVID-19 pandemic and recovery period,
content such as new movies, live webcasts, and interactive entertainment in living rooms may
online concerts through OTT video platforms, and provide opportunities for the development of cloud
they are diversifying their consumption scenarios. gaming, the report noted (Xinhua, “China’s Cloud
These changes in consumption behaviors have an Gaming Industry to Grow Fast: Report”).
influence on the entertainment and media industry.
In terms of revenue, China and the United States are The number of China's game users reached 667
still the world's two largest movie markets. China's million in the first half of 2021, up 1.38% year-on-
film revenue is expected to account for 23.5% of year, according to a report released at the China
the world's total movie revenue of US$47 billion in Digital Entertainment Conference, or China Joy,
2025, second only to 24.1% from the US, said PwC. which was held in Shanghai from July 30 to Aug 2.
Furthermore, China is the world's largest video Sales revenue for China's game market hit 150.49
game and esports market, with combined revenue billion RMB (US$23.28 billion) in H1, an increase
reaching US$31.5 billion in 2020. The compound of 7.89% on a yearly basis. That of Chinese-
annual growth rate of video games and esports is developed games was 130.11 billion RMB, up 8.3%
estimated to reach 4.9% and 12.3%, respectively, yearly, claiming more than 80% of sales revenue
from 2021 to 2025, the report said. Meanwhile, the for the whole market, Chinanews.cn reported
revenue share of app-based social and casual games
374
