When Ye Wei, a postgraduate from Macao University of Science and Technology, decided to join the game industry three years ago, his family was up in arms. Nevertheless, against his parents' wishes, Ye moved to Beijing to pursue his dream.

Many young people in China like Ye are now part of the game industry, but their choices have often been misunderstood and many have simply been regarded as video game addicts.

But things began to change in early 2019, when the Ministry of Human Resources and Social Security released an updated list of occupations, which included esports operator and player among 13 new occupations.

"2019 was a year of challenges and opportunities for me. It was also a rewarding year," Ye told Beijing Youth Daily. He has witnessed the maturing of the Chinese game industry since regulators lifted the freeze on approval for new games since the end of 2018. Now, his work as a game planner for Perfect World, an online multiplayer games publisher, has gained more recognition.

China currently has the world's biggest mobile game industry, as its booming population becomes more willing to pay for digital products and services, according to an annual report released by the Game Publishing Committee (GPC) of the China Audio-Video and Digital Publishing Association and the market research firm IDC in December 2019. Meanwhile, esports began to gain more prominence since 2018, when the Invictus Gaming team won China's first League of Legends World Championship. The popularity of mobile games, game streaming and esports is feeding each other, making the industry a multi-billion-dollar business.

Major drivers

China's game sector generated 230.88 billion yuan ($33.5 billion) in revenue in 2019, an increase of 7.7 percent over 2018, with mobile games accounting for 68.5 percent of the total revenue, said the GPC report.

A Morgan Stanley report in May 2018 predicted that entertainment spending by the average Chinese consumer will grow 8 percent annually over the next decade, with games likely to drive growth and mobile games the dominant force, adding that all signs point to this trend continuing for years to come.

China has grown into a potent esports market with strong influence around the world. The country had 640 million game users in 2019, up 2.5 percent from 2018, according to the GPC report. It stated that esports is a key driving force for boosting the growth of the domestic game industry and an important cultural consumption indicator.

The GPC annual report also showed that China's esports market revenue grew from 83.44 billion yuan ($12.12 billion) in 2018 to 94.73 billion yuan ($13.76 billion) in 2019, up 13.5 percent year on year. Figures from Newzoo, a game and esports analytics and market research company, predicted that Chinese esports viewers will increase to 170 million in 2021, accounting for 30 percent of the global total.

On December 31, 2019, the Beijing Municipal Government unveiled a plan to become the international capital of online games and a world-leading research and development (R&D) center for high-quality games by 2025.

Promoting the development of the game industry will not only help to enhance cultural strength, but also expand employment and attract the younger generation to settle down, Ye said. "I was thinking of moving to Shanghai to further my career, but with the recent plan, I feel more confident and have decided to stay in Beijing," he added.

In a similar vein, Shanghai announced several policies to become the international capital of esports. If a city wants to attract the younger generation, an effective talent introduction program is needed, Ye said. At the same time, local governments should be highly sensitive to new forms of business and be open to emerging industries such as esports.

Some local governments are building "esports towns" and "game cities," providing aggressive growth targets. For example, Hainan Province in south China issued preferential and supporting policies for esports in 2019, such as tax cuts for companies, a visa-free regime to facilitate international esports players' participation in competitions in China and the exploration of new live-streaming channels.

Xiao Hong, CEO of Perfect World, said the esports sector will see key development in the next five to 10 years. "It will also empower other industries, generating a variety of new businesses in terms of tourism, finance, e-commerce and training. Thus it will generate new momentum in the economy and bring more development opportunities to cities," Xiao added.

In 2019, game-streaming revenue exceeded 10 billion yuan ($1.45 billion) for the first time, with a growth rate of 48.9 percent. A leading game-streaming platform DouYu, originally a spin-off of video-sharing platform AcFun, went public on the U.S. NASDAQ exchange in July 2019. Its debut followed Huya's, another major game-streaming platform, and both are backed by video gaming giant Tencent.

The Information Office of the Beijing Municipal Government holds a press conference on promoting the healthy development of the capital's game industry on December 31, 2019 (COURTESY PHOTO)

Going global

Independent games developed by domestic firms continued to dominate market sales in China, in addition to gaining higher growth rates in overseas markets. In 2019, the actual sales revenue of Chinese games overseas was $11.59 billion, a growth rate of 21 percent, according to the GPC report.

China has become the world's second-largest game exporter, following the U.S. Moreover, North America, Western Europe, Japan and the Republic of Korea (ROK) have become major markets for Chinese games, said Wang Xu, chief analyst of Gamma Data, a Chinese research institute specializing in video games, movies and television programs.

The growth is mainly derived from increasing investment in enhancing R&D capability, Wang added.

Many Chinese online games have received support from foreign investors in recent years. For example, Sony Interactive Entertainment (Shanghai) initiated the China Hero Project in 2016, aiming to help Chinese developers create competitive games and boost the long-term development of China's game industry. It has provided financial support for 11 game development teams since its inception, according to Soeda Takehito, president of the company.

NetEase Games, another major Chinese game company, and Tencent saw total revenue of $472 million from overseas App Store and Google Play purchases in 2018, surging 505 percent from the previous year. The two have also invested in several foreign game firms and studios including Bluehole, the ROK publisher of PlayerUnknown's Battlegrounds, a well-known online multiplayer battle royale game since 2017.

Tackling addiction

Chinese game publishers are taking measures to combat game addiction and shoulder more social responsibilities. Addiction among minors has been a hot topic within the Chinese game industry for over a decade.

In 2018, the Publicity Department of the Central Committee of the Communist Party of China established a new game regulation arm to review online game issues. The National Press and Publication Administration also issued a notice on preventing minors from becoming addicted to online games in 2019, which emphasizes the shared responsibilities of online game providers, government agencies and social forces in jointly managing the issue.

Tencent introduced an upgraded version of its real name registration system in 2018, which identifies the age of players and limits the playing time of children.

It has also implemented features to curb in-game overspending, which notifies guardians when their children reach a spending threshold of 500 yuan ($75) a month. Currently, 31 Tencent mobile games are equipped with an anti-addiction system.

Copyedited by Rebeca Toledo

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