2025 China Online Gaming Market Opportunities

China's Online Gaming Market

China's gaming market is expected to maintain steady growth of approximately 5% in 2025, with traffic dividends further diminishing (growth in mini-game user traffic is also beginning to slow). Competition remains intense, and industry revenue increments will be concentrated primarily among a handful of new titles.

According to Gamma Data estimates, China's gaming market revenue grew by 6% year-over-year to RMB 322.0 billion in 2024. Key growth drivers include:

(1) Normalized regulation in the gaming industry, with an increased number of game licenses issued in 2024, generating incremental contributions from more new titles.

(2) The mini-game market maintaining rapid growth, with its market size expected to exceed RMB 30.0 billion in 2024.

(3) High-quality new titles such as [ Dungeon & Fighter: Origin ], [ Black Myth: Wukong ], and [ Zenless Zone Zero ] contributing significant revenue increments.

Since 2024, the gaming industry has gradually returned to a normalized regulatory environment. By November 2024, China's National Press and Publication Administration had issued 1,184 domestic game licenses, a significant increase compared to 986 domestic game licenses issued throughout 2023. In accordance with regulatory requirements, major gaming companies have strictly implemented anti-addiction systems for minors, with no major regulatory risk events occurring in 2024. Normalized industry regulation and increased license issuance will facilitate product innovation for gaming companies and reduce product trial-and-error costs to a certain extent.

China's Mini-Game Market

According to Gamma Data, mini-game market revenue grew 61% year-over-year to RMB 16.6 billion in the first half of 2024, with in-app purchase (IAP) and ad monetization revenues growing 82% and 41% to RMB 9.1 billion and RMB 7.5 billion, respectively. Benefiting from continuous product enrichment and improved user penetration, mini-games have achieved rapid growth annually since 2021. However, as the mini-game market revenue base expands and user growth slows (according to QuestMobile, WeChat mini-game MAU in September 2024 was essentially flat year-over-year at 520 million), mini-game market growth is expected to moderate in 2025, contributing more limitedly to overall gaming industry growth.

Revenue growth in China's gaming market is expected to remain concentrated among a select few high-quality new products, with focus on quality titles from NetEase and Tencent:

1. NetEase: Two highly anticipated titles, [Where Winds Meet] and [ Marvel Rivals ], launched in December and are expected to become primary drivers of gaming revenue growth in 2025. The company also plans to conduct the first round of offline technical testing for its highly anticipated anime-style open-world game [ Project Mugen ] by the end of 2024.

2. Tencent: [ Goddess of Victory: Nikke ] (a strong overseas performer) and [ Squad Busters ] received licenses in November 2024. [ Honor of Kings: World ] held an offline media playtest session in October 2024, with development progressing well and positive feedback from testers.

Tencent's 2025 gaming revenue is projected to grow 8% year-over-year. Tencent is expected to maintain double-digit year-over-year gaming revenue growth in the first half of 2025, though growth will moderate in the second half due to a high base effect. By product, key focus areas include:

1. Sustainability of [ Dungeon & Fighter ] Mobile's performance, expected to contribute approximately 3% of gaming revenue increment in 2025.

2. Overseas gaming revenue growth, including sustainability of Supercell titles and PUBG Mobile revenue growth, expected to contribute approximately 3% of gaming revenue increment in 2025.

3. Whether evergreen titles [ Honor of Kings ] and [ Peacekeeper Elite ] can maintain stable trends. Assuming low single-digit growth for both games, they are expected to contribute approximately 2% of gaming revenue increment in 2025.

NetEase's gaming and other VAS revenue is projected to grow 7% year-over-year in 2025. Focus will be on the post-launch performance of two highly anticipated December titles, [ Where Winds Meet ] and [ Marvel Rivals ]. By product, key focus areas include:

1. Post-launch performance of [ Where Winds Meet ] mobile/PC versions, expected to contribute approximately 4%/2% of gaming revenue increment in 2025, respectively.

2. Post-launch performance of [ Marvel Rivals ], expected to contribute approximately 2% of gaming revenue increment in 2025.

3. Revenue sustainability of returning Blizzard titles, expected to contribute approximately 2% of gaming revenue increment in 2025.

4. Revenue sustainability of [ Naraka: Bladepoint ] mobile version, expected to contribute approximately 1% of gaming revenue increment in 2025.