VR Games Will See Explosive Growth In China

VR Games Will See Explosive Growth In China
January 26, 2017

Virtual reality games and mobile eSports are expected to see explosive growth in China, according to a report by research firm IDC.


IDC expects China’s VR game industry to see explosive growth by the end of 2017 and market size to approach $11.5 billion USD (RMB80.0 billion) by 2020.


“China’s gaming industry will see further growth,” says Johnny Zhou, analyst at IDC China. “While remaining closely involved with the traditional PC and mobile industries, the gaming industry will draw from artificial intelligence, wearables, virtual reality, big data, cloud service and other emerging technologies and use animation, literature, movie & TV, live broadcasting, themed amusement park and other traditional entertainment industries to create more disruptive value.”


However, IDC also notes that the VR game hardware industry is still relatively fragmented, and there is lack of large-scale distribution platforms for VR content.


Game distribution channels and content production standards will play an important role in the development of the VR industry in China, the report claims.

Last year HTC Vive announced to open VR arcade cafes around China and the availability of its new software platform to distribute games needed for arcade centers.


Here are the other predictions from IDC on the future of China’s gaming industry.


Mobile game quality will improve further.


More high-quality mobile games will emerge in 2017 following the extreme success of Onmyoji and other premium mobile games in 2016. Companies are expected to invest more in R&D to improve game quality and spend less time chasing trends just to make quick money. Meanwhile, 5G mobile networks will help solve such problems as limitations on mobile game size, enabling future mobile games to feature more exquisite graphics in richer worlds.


Mobile eSports will develop fast.


In 2016, eSports games generated revenue of US$7.3 billion (RMB50.5 billion) in China, of which mobile eSports games contributed 34.0%, or US$2.5 billion (RMB17.1 billion). IDC forecasts revenues from mobile eSports games in China to reach US$7.7 billion (RMB53.7 billion) by 2020. Mobile eSports games are likely to evolve in two directions: light mobile eSports games such as chess and card games for the mass market, and heavy mobile eSports games such as shooting and multiplayer online games oriented towards professional eSports players.


Game exports will grow gradually.


China-developed online games generated overseas revenue of US$7.2 billion (RMB50.2 billion) in 2016, accounting for 41.6% of total revenues, and contributing to a double-digit growth rate. Led by Youzu, ELEX and Perfect World, Chinese game companies saw handsome returns from overseas markets. International social networking giants such as Facebook are also planning to deepen their cooperation with Chinese game companies. The Google Developers Platform officially opened to Chinese developers on December 8, 2016, allowing Chinese mobile game developers to use the platform’s resources to promote their products to overseas markets.


Opportunities and competition in game live broadcasting.


Game live broadcasting will become richer in terms of content and communication channels thanks to explosive growth in mobile eSports and the development of VR technology. More PGC (professional generated content) will appear on major live broadcasting platforms in 2017. In addition, competition for game live broadcasting copyrights will intensify — especially in eSports live broadcasting. In addition to dedicated online game live broadcasting platforms, traditional video websites like LeTV Sports and Tencent Video have also joined the game live broadcasting race, which is likely to expand the game live broadcasting market further in 2017.


Gaming cloud will improve further.


Game R&D and operations, especially for mobile games, will become more dependent on the cloud in the future. In 2017, all major gaming cloud service providers will continue to serve the entire gaming ecosystem, integrating game testing, distribution, operations, marketing and game-derived live broadcasting and eSports. IDC predicts China’s gaming cloud market to see annual revenues of US$525.6 million (RMB3.7 billion) by 2020.


Console game market will continue to grow.


IDC sees huge room for growth in the console game market in China. China’s console game market is expected to have reached US$576.0 million (RMB4.0 billion) in 2016, including both game & hardware sales revenue. Console games alone contribute a revenue of US$95.0 million (RMB660.0 million), up 200% year-on-year. IDC forecasts the number of console game users in China to hit 10.5 million by 2020, or 10 times the current number. As what Hiroyuki Oda, Executive Vice-President for Japan and Asia at Sony Computer Entertainment once said, despite its being a niche market, the console game industry has unlimited potential for future growth.


Games and wearable devices will combine.


IDC forecasts China wearable device sales of more than US$3.7 billion (RMB26.0 billion) in 2017. Worldwide, numerous outstanding tech companies are now committed to using wearable devices in gaming. 2017 will see the birth of such products as smart gloves for VR game control.


AI will improve the gaming experience.


AI is developing fast, and its core functions of computing, sensing and cognition will be used to improve the gaming experience. Alpha Go showed the world its impressive powers in 2016 when it became the first computer Go program to beat a professional human Go player. In the future, image recognition, machine learning and other AI technologies will greatly improve the playability of highly open sandbox and strategy games with complicated game elements, as well as making new types of games possible.


Professional game talents to become sought-after assets.


Professional gamers and industry professionals are expected to be in high demand in China in the future. Demand will be especially strong for professional eSports players, management personnel, eSports relaying personnel, VR game R&D personnel, and game anchors. IDC forecasts a shortfall of over 100,000 game-related personnel in China in 2017. As a result, strong growth is expected for game-related education programs.

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