Mobile game sector records 55b yuan revenue in Q1

The mobile game industry hit 55 billion yuan in revenue in the domestic market from January to March, reaching the highest level in history, with an increase of over 49 percent year-on-year, according to Shanghai Securities News.

Affected by the novel coronavirus outbreak, more people than ever have stayed at home and turned to online games, as several gaming companies featured a surge for net profits. Analysis from Gamma Data, a Beijing-based research company, concluded that 40 percent of gaming enterprises saw a net profit increase of over 50 percent, while even 24 percent of companies doubled their net profits in the first quarter.

"The epidemic to a great extent has benefited the gaming industry," a manager from an A share-listed gaming company told Shanghai Securities News. "There are fewer entertainment options for people, while the flexibility and high interactivity of home-based games satisfy user demands."

Sanqi Interactive Entertainment, a Shanghai-based company focused on design, development and operation in mobile games and web games, posted revenue of 4.34 billion yuan, up 33.76 percent from the previous year, with net profit increasing 60.4 percent to 729 million yuan in the first quarter.

Apart from the domestic boom, China-developed mobile games also witnessed positive business performance in the overseas market. According to Game Publishers Association Publications Committee, also known as GPC in China, the overseas sales revenue of China-developed mobile games registered $3.78 billion in the January-March quarter, seeing a rapid growth of 31.19 percent month-on-month.

The prosperity of the mobile game industry, however, is mainly generated by the 59 percent of game players in China, while the remaining 400 million phone users, who have not yet played mobile games, are still a large pool of potential customers.

As China Internet Network Information Center (CNNIC) reported, the number of Chinese netizens reached 904 million by March this year, with 532 million online game players. The amount of mobile game players hit 529 million, increasing 70.14 million compared to the end of 2018.

Since online game and mobile game users only account for nearly 60 percent of the overall internet and mobile users, large room for growth still remains. How to activate these non-game players is one of the key challenges for gaming manufacturers, according to the report.

"Middle-aged and elderly consumers are believed to be the main force of online entertainment consumption in the future," a gaming industry employee told Shanghai Securities News. A new batch of gaming products targeted at the post-50s and post-60s generations are about to enter the market.

Updated technologies such as virtual reality and 5G connections also bring vitality and fierce competition to the gaming industry. As of the end of March, China had set up 198,000 5G base stations, with over 50 million users across the country.

Although the epidemic has gradually come under control, the stay-at-home economy is expected to maintain growth at a high level. Sanqi Interactive Entertainment, according to its official business report, is estimated to reach first-half net profits of 1.4 to 1.5 billion yuan, up 35.52 percent to 45.2 percent year-on-year.