Will China be Honored as King of Games from “Honor of Kings”?

Chinese internet behemoth Tencent announces 70% surge in profit in its latest quarterly report, buoyed by revenue from its mobile game “Honor of Kings”. With more than 182 million monthly active users, “Honor of Kings” is now the No.1 global mobile game, attracting players spending an average of 942 minutes each month.

Active Users.PNG

(Source: DataYes RoboR Research Platform, Southwest Securities)

The success of the mobile games is not only for Tencent but also for China’s gaming industry. Mobile games that account for 56.3% of the total gaming revenue is now the key driver of the industry growth. With a market size of 56.14 billion yuan, mobile game has contributed nearly 90% of the gaming market growth.

Revenue Proportion.PNG

(Source: DataYes RoboR Research Platform, Southwest Securities)

The mobile game boom also boosts China's gaming industry to become more competitive in the world. In 2016, China has 600 million gamers that generated the revenue of 165.6 billion RMB ($24.6 billion) just ahead of the U.S.’s $24.1 billion, leading China to become the “gamer capital of the world”. In the first half of 2017, the revenue of China’s gaming market has reached 99.78 billion RMB ($14.82 billion), up 26.7% from a year ago. It is estimated that the revenue will reach more than 300 billion RMB in 2019.

China Gaming Market.PNG

(Source: DataYes RoboR Research Platform, iRearch)

To keep this dominant role in the gaming industry, China's game developers are busy expanding the overseas markets, not only in developed countries like the U.S., but also in emerging markets like India. In the first half year of 2017, China’s independent research and development online games generated $3.99 billion sales overseas, with a 57.7% year over year growth.

(Source: DataYes RoboR Research Platform, Southwest Securities)

Tencent is preparing to bring Honor of Kings to the US and Western Europe from as early as September. People now are expecting to see how China's games will perform in the overseas market.