Levelling up: China as a destination for UK games

Neil Semple, head of creative content at the Department for International Trade, talks up China as a huge potential market for UK-made games.

The UK boasts one of the most vibrant and dynamic gaming industries globally. But in terms of sheer size, there is no market like China. Home to almost 560 million gamers, it has the world’s largest gaming audience. Outperforming even the established US market, it is also the world’s largest, valued at $24.4bn (£19.6bn) in 2016. 

China presents opportunities for all types of companies, and the sections below outline some of the most promising growth areas – as well as considerations.

Mobile is on the rise… 

That mobile is the industry’s main growth platform is indisputable, and China is no exception. A ‘mobile-first’ country, mobile games already make up 41 per cent of this market. 

Within mobile, savvy operators will focus on eSports as one of the main windows of growth. eSports titles make up nearly a quarter of the 100 best-performing Android games.

Although Android dominates, iOS still takes a disproportionate amount of revenue in China, mainly because more affluent users have iPhones and spend more on games. Freemium remains the favoured business model for mobile games, and understanding the marketing channels and purchasing practices of the consumer is another reason to find a good domestic partner. 

The main players in the mobile industry are to be found in Beijing, Shenzhen and Chengdu.  

…but PC reigns supreme 

Mobile might be the future, but PC is still China’s most popular gaming platform, netting about $13.8bn (£11.1bn) of revenue in 2016. 

Domestically produced games dominate the charts, so to maximise growth opportunities, UK companies should generally be looking to export their services in animation, scripting and production, rather than only focusing on finished products.   

In December 2016, for instance, Dundee-based Abertay University signed an agreement to increase learning opportunities for Chinese graduates by offering an exclusive route to entering a course in games development. 

Chinese investors inside and outside of games are very active in purchasing companies and technology as much as content in the West. The largest UK online games company, Jagex, was purchased by a Chinese investment group in 2016. The largest Chinese games company – in fact the largest globally – Tencent bought a controlling stake in the UK’s Miniclip.   

Getting your content and revenue models right may take time but what is clear is that China is going to be the largest market for games for decades. Make it a priority now before you have to. Relatively simple actions such as enabling AliPay as a payment option for your game will make a huge difference and are a good start.  

The main players in PC and online can be found in Shanghai, Beijing and Shenzhen. 

Virtual reality is a nascent segment but one with unparalleled growth potential in China. Having made just under $1bn (£0.80bn) in 2016, it is predicted to bring in a staggering $8.5bn (£6.8bn) by the end of the decade. 

VR was the main technology focus at the UK-China Creative Innovators Forum in Shanghai in December 2016. Around 15 UK companies gave presentations and met potential Chinese partners and customers, paving the way for many more to come. 

China is an exciting market with opportunities for companies of all shapes and stripes. However, it is also a sprawling market with a domestic industry that is a force of its own. 

UK companies, small or large, looking to export can find options and support via great.gov.uk and the Government’s Exporting is GREAT initiative. 

The Department for International Trade will also be bringing a delegation of Chinese gaming companies to the London Games Festival in April so if you plan to be there, look out for some of the China-focused activities. Similarly, if you are interested in coming out to China, there will also be a group of UK companies attending China Joy Shanghai, the biggest gaming conference of the year. If you are interested in joining, more information will be available in the spring at www.ukie.org.uk/international-trade-shows.