Broadly, the growth of the video game market in China is tied to expansion of its
technology and digital economy from the 1990s to present day, which by 2016 represented over 30% of its
gross domestic product. As such, China saw little of
arcade games or the
first generation of home consoles, like the
Atari 2600 and locally made
Pong consoles. By the 1980s, China's economy had significantly improved. The number of arcades in China increased significantly during fall 1985. As home ownership of computers in urban China increased after 1995, the Chinese PC games market grew significantly. However, the ban was poorly enforced, resulting in consoles being available on the gray market, often hacked. Importers, however, did not hide it from the government, and their stores could be found in large shopping malls. Despite this, the ban resulted in limiting of supplies and very high prices, far beyond the average citizen. The alternative was 8-bit and 16-bit clones manufactured in China in government-approved forms, such as educational computers, plug'n'plays, dvd players and handhelds. Global video game producers also attempted to enter the market with government approval, notably
Sega Pico in 2002, Sony's
PlayStation 2 in 2004 and several of Nintendo's consoles rebranded under the
iQue partnership. However, with the restriction on game imports and their content, high price, huge piracy, outdated graphics, these consoles did not catch on in China. The ban did not include games available on personal computers (PC), and as a result, the PC video game market in China flourished over the next fifteen years. Internet cafés flourished, growing from 40,000 in 2000 to over 110,000 by 2002, and have remained numerous since. However, since such arcades offered a low-cost way to play games without a PC, they still became a thriving industry comparable to
PC gaming at internet cafés. As a result, Chinese
gamers frequently visit the arcades to play
action games, particularly
fighting games, and occasionally unlicensed arcade ports of popular PC or
mobile games such as
Angry Birds or
Plants vs. Zombies.
Online gaming (2004–2008) Legitimate acquisition of games and the hardware to play them was still relatively expensive in China, which continued to fuel the video game clone market in China. Additionally, these systems were required to have the player to log in using their national identification. However, at the time of implementation, not all publishers incorporated the required controls, and for those that did, players would find ways around the limitations, such as using family member IDs, or otherwise would simply play past the time requirements as there was nothing else to do beyond the video game.
Social and mobile gaming (2008–2014) By 2007, the size of the Chinese video game market was estimated to be about with around 42 million players, having grown 60% from the previous year mostly driven by online gaming. At this stage, China's impact on the larger global market, valued at , was not considered significant, as much of it was still driven by the grey market for clones and pirated games. However, the rapid growth led to forecasts that China would be a major contributor to the global market within five-years time. A number of other games have since used similar game mechanics, such as
Sunshine Farm,
Happy Farmer,
Happy Fishpond,
Happy Pig Farm,
Farm Town,
Country Story,
Barn Buddy,
Sunshine Ranch, and
Happy Harvest, as well as parodies such as
Jungle Extreme and
Farm Villain. This further prepared the China market for
mobile games around 2012, where there are about one billion mobile phone subscriptions, according to a
United Nations report, and after
Apple secured deals to distribute their
iPhones within China. Mobile devices in China are less expensive than computer or console hardware, and also provide Internet functionality; for many, they are the only form of Internet connectivity they have, making them popular gaming devices. Mobile games in China grew rapidly over the next several years, growing from about 10% of the Chinese video game market in 2012 to 41% in 2016. This expanded to more than 50% by 2018. Furthering the growth of the social and mobile game markets was the fact that the anti-addiction measures applied to online games did not apply to these types of titles; it was not until 2017 where renewed concerns about mobile titles like
Honor of Kings led Tencent to implement a similar anti-addiction system for its portfolio. Social and mobile gaming significantly grew the Chinese video game market beyond earlier estimates. By 2013, the Chinese market for video games saw nearly a ten-fold growth since 2007, valued at of the global , with over 490 million players, counting only those on personal computers; since consoles were still banned, these numbers do not take console players into account. Microsoft and Sony quickly took advantage of the lifting of the ban, announcing sales of the Xbox One and PlayStation 4 platforms within the FTZ shortly after the 2014 announcement. Microsoft established a partnership with BesTV New Media Co, a subsidiary of the
Shanghai Media Group, to sell Xbox One units in China, with units first shipping by September 2014. Sony worked with
Shanghai Oriental Pearl Media in May 2014 to establish manufacturing in the FTZ, with the PlayStation 4 and PlayStation Vita shipping into China by March 2015. CEO of Sony Computer Entertainment
Andrew House explained in September 2013 that the company intended to use the PlayStation Vita TV as a low-cost alternative for consumers in an attempt to penetrate the Chinese video game market. Both Microsoft and Sony have identified China as a key market for their next generation of consoles, the
Xbox Series X and
PlayStation 5 respectively. Later, Nintendo had teamed up with
Tencent by April 2019 to help sell and distribute the Nintendo Switch as well as aid its games through the Chinese government approval process led by
National Radio and Television Administration. The
Nintendo Switch went on sale in China on December 10, 2019, though unlike the international version; this unit included several concessions to region-lock it to China. Even with the ban lifted, console sales were slow, as consoles require dedicated space in home and did not have additional functionality, like personal computers, and further slowed by continued popularity of Internet cafés. The hardware grey market also persisted, drawing away legitimate sales of consoles. Of the industry revenue in 2018, only about was attributed to console sales. It is expected that as interest in legitimate sales of consoles increases in the future, the grey market will wane. Despite official availability of the Switch, imported and grey-market sales of Switch consoles still dominated China; while Nintendo and Tencent reported that a million Switch consoles had been sold by January 2021, the total number of Switch consoles in use within the country was estimated to be at least twice as high due to imported, non-region-locked versions.
Approvals freeze and further steps to restrict youth gaming (2018–2023) '' in
Chengdu,
Sichuan In March 2018, after the structural re-organization of State Administration of Radio and Television (SART), over a period of several months, no new game licenses were given out. Further, MOC had made the process of getting these licenses more stringent. In late August 2018, the
Chinese Ministry of Education called on the Chinese government and SART to also address the growing issue of
myopia in children which was attributed to long hours of gaming on small screens like with mobile devices. The Ministry of Education had asked SART to consider placing restrictions on the number of hours each young player can play a game. On news of this, Tencent shares lost 5% of their value, an estimated on the stock market, the next day. A further approval route was closed by Chinese authorities in October 2018; this "green channel" route, which had been in place by August 2018, allowed a game to have a period of one month on the market for purposes of consumer testing without having full government approval, but had been seen by game publishers as temporary relief from the current ban. Tencent had been planning on distributing and monetizing from
Fortnite Battle Royale via this method before this route was closed. With China's effective ban of new games continuing into October 2018, Chinese players have found other routes of getting new games, which include using
Steam which uses overseas servers. Further, existing titles released before the freeze that continue to offer new content have seen a resurgence in players and spending as a result. By December 2018, the Chinese government had formed the
Online Game Ethics Committee falling under the
National Radio and Television Administration, which will review all games to be published in China for appropriate content as well as issues related to childhood myopia. The committee, by the end of the year, had restarted the approval process and will be working through a backlog of submissions to review in an expedited manner to allow new games to be released. Initial approvals to 80 back-logged titles was granted within days, but notably lacked games published by Tencent and Netease, the two largest publishers in China. After several more rounds, Tencent had two games approved near the end of January 2019, but did not include either
Fortnite Battle Royale or ''
PlayerUnknown's Battlegrounds'', two major titles that were financial drivers in other countries. A second freeze on approvals started in February 2019, as any further approvals on new games were suspending until the committee has been able to clear the backlog of the titles from the prior freeze. By this point, only about 350 games had been approved from the previous freeze. According to China's State Administration of Press and Publication, the freezes were put in place as the video game industry had grown too rapidly in China at a rate that passed the capabilities for regulation to keep up. The second freeze that started in February 2019 was to put in place to give regulators a change to tune the game approval process to meet the current market size. The freeze is expected to be lifted in April 2019, alongside a new set of regulations for game approvals. These new changes include limiting the number of games that can be approved each year to around 5,000 games, strictly banning
video game clones and games with obscene content, and placing more anti-addiction controls on mobile titles aimed at younger players. The nearly year-long freeze has had rippling effects on the global video game industry. Whereas in 2017, around 9,600 new games were approved, only around 1,980 were approved within 2018. Tencent had been one of the top 10 companies in the world at the start of 2018, but by October, its stock had dropped in value by 40%, an estimated , and knocked the company out of the top ten.
Apple attributed revenue loss in the fourth quarter of 2018 to China's approval freeze, which had also affected mobile video game apps. The freeze was expected to impact total revenues of the video game industry in 2019, with one analysis projecting a decline in revenue from the previous year, the first time in only a decade. The Chinese government continued to push on restrictions on gaming after the approvals freeze was lifted, asserting its efforts were to restrict the influence of gaming on youth. The government has placed restrictions on the amount of time minors can play video games, first in 2019 to 90 minutes per day on weekdays and three hours on weekends, Since March 2021, there had been new pressure on video games, kicked off by statements made by
General Secretary of the Chinese Communist Party Xi Jinping during the annual
Two Sessions meetings where he claimed that video games could have a bad influence on the minds of children who are psychologically immature. The government had stopped approval of games starting in August 2021 in an apparent new lockdown related to game content. Later in September 2021, when both Tencent and Netease were notified by the government of an upcoming hearing and reminding them than violations of their youth gaming restrictions would be seriously dealt with, both companies' stocks dropped by about 10% due to fears that the government may be clamping down more on gaming in the future, including another potential approvals freeze. Over 200 Chinese game companies, including Tencent and NetEase, signed a statement that month pledging that they will work to regulate youth gaming under the government's new regulations, as well as to enforce new rules relating to games involved "effeminate" portrayal of men in games. As reported by the
South China Morning Post, an internal memo sent by the state's gaming trade organization to game companies in September 2021 for purposes of training further clarified that that government saw video games not as "pure entertainment" but as a form of art and thus works that must uphold "a correct set of values" related to China's heritage and culture, and would be more restrictive in what games they would approve within the country. According to the
South China Morning Post, the approvals for new games persisted through the end of 2021, and due to the lack of approvals, more than 14,000 game-related companies were deregistered in China through 2021. The approvals freeze was lifted by April 2022 when new approvals were announced. In December 2021, players within China reported that the international version of Steam had been blocked in China. However, it turned out to be a partial disruption of Steam's web version and as of 2024, the International version of Steam is still fully accessible in China barring some occasional connection issues The government also banned the live streaming of unapproved games in April 2022. A report issued in November 2022 by research firm CNG and the China Game Industry Group Committee, both with strong associations with the Chinese regulatory bodies, stated that the steps taken to reduce youth video game addiction had been working, with more than 70% of the country's youth gaming less than three hours a week. The report suggested that the regulatory bodies should be able to back off on the tight restrictions they had placed on publishers like Tencent and NetEase over the prior few years. The NPPA issued new proposed rules in December 2023 aimed to further reduce the amount of time citizens play games and reduce in-game spending. These rules would prevent games from having daily or first-time login rewards and limit how much virtual currency that players could keep within in-game wallets. These rules appeared to be directly aimed at MMOs and
gacha games, both popular titles within China, and as a result, both Tencent and NetEase saw major stock losses at the announcement of these rules totalling $80 billion. The government quickly walked back on these recommendations, and reported let go of the official that had drawn them by January 2024.
Global growth (2024–present) As of 2024, China has begun approving more and more games as it seeks to revive the industry after a prolonged down period after a 2021 crackdown. The government has approved an average of 107 games per month in 2024. This came along with China's first AAA game
Black Myth: Wukong. Some analysts expect
Black Myth's success to have a positive impact on the Chinese gaming industry as the government could now be more inclined to issue game licenses to encourage domestic studios to work on more AAA games considering
Black Myth: Wukong's domestic and international success China only represented 0.8% of total Steam users in 2014 and reached 23.6% in March 2025, a figure placing the country above the United States in terms of users, indicating an increasing relevance of Chinese audiences as video game consumers on the global stage. ==Online gaming==