China's cloud gaming market may exceed one billion yuan this year

Shanghai, June 29 (Reporter Gao Shaohua) - Cloud gaming – an important trend for the gaming industry's future development – has grown rapidly in China this year, and major gaming companies are racing to take advantage of this emerging field. Experts believe that cloud gaming's industry chain has basically taken shape in China, and that it will enter a period of rapid growth in the next three to five years.

According to the latest "Cloud Gaming Industry Survey Report 2020" published by Gamma Data, the value of China's cloud gaming market is expected to exceed one billion yuan in 2020. Over the next two years, the market is expected to grow by more than 100% per year.

At present, the vast majority of game users have some degree of experience or familiarity with cloud gaming products, and some are even paying to play on cloud gaming platforms. The cloud gaming market will primarily aim its marketing at young male users, hoping to convert them. Most users want to be able to play cloud games on their mobile phones, while nearly 60% want to play mobile games on cloud platforms, which suggests that moving mobile gaming to the cloud will also present attractive market opportunities.

According to industry experts, the various segments of the cloud gaming industry chain have been beginning to appear in the market since 2019: now, this chain has already taken preliminary shape. Although fields such as 5G networks, software solutions and hardware support for cloud gaming, cloud gaming content mining, and cloud gaming platform services are still in their early stages of development, if the signals given off by the level of financial and material investment in these areas are anything to go by, cloud gaming will enter a period of rapid growth in the next three to five years.

Major domestic game enterprises are also accelerating the pace of distribution of this emerging blue ocean market. As of May 2020, 35.1% of companies with a market capitalization of 10 billion yuan or more had already started developing cloud games, but relatively few enterprises with a market capitalization of less than 10 billion yuan had done the same. Companies with skin in the game include Tencent, NetEase, Perfect World Games, Wuhu Sanqi Interactive, Shanda, CMGE Technology, Seasun Games, and Hubei Century Network. These companies have different core strengths – for example, some are platform-driven, others content-focused or technology-focused, still others are all-rounders.

According to Tan Yanfeng, vice president of Shanda Games, the co-existence of a number of tech giants is driving the rapid iteration of 5G cloud gaming technology. This will encourage new application scenarios and types of gameplay that are adapted to cloud gaming, which will broaden cloud gaming's horizons of development.

Giant Interactive said that cloud gaming is currently in the lead-in period, and that as a content producer, the company will remain sensitive to the field through investment and collaboration, keeping a keen eye on it in order to seize any market opportunities.

Zhu Xiaojing, CEO of Focus Games, believes that 5G will bring huge changes to the gaming industry. Focus Games and China Unicom have entered into a partnership to jointly announce a new era of 5G for handheld games. As a result of 5G's low latency, "it has become possible for thousands of people to play e-sports at the same time and in the same place, and 5G casual e-sports will not be far behind." ”

As for the current cloud gaming boom, however, Gamma Data analysts believe that the size of China's cloud gaming market will maintain steady growth in the short term; explosive growth will still take some time. There are a number of reasons for this. Firstly, the revenue capacity of cloud gaming platforms is still relatively limited; secondly, there is still fairly little attention paid to cloud gaming overall; thirdly, important infrastructure that is needed for cloud gaming – such as 5G coverage and edge node construction – still needs more time; and fourthly, important technologies needed for cloud gaming still have room for development, and are for now insufficient to meet all types of gaming demand.