mobile games from Tencent, miHoYo are still top-grossing titles

Chinese social network and gaming giant Tencent retained its position as the world’s highest-earning mobile game company, with Honour of Kings and PUBG Mobile took the top spot in terms of income from Apple’s iOS App Store and Google Play, Sensor Tower data showed.

Honour of Kings and PUBG Mobile titles raked in US$735.4 million and US$643 million in the first quarter, respectively.

Gacha game Genshin Impact, which developed by Shanghai based miHoYo, ranked third earning US$551 million in the period, according to the mobile data analytic firm. Since its public releases in September 2020, Genshin Impact took both domestic and overseas markets by storm, generating USD2 billion in its first year on mobile.

Founded in 2012, miHoYo so far employ 4,000 people worldwide at offices including China’s Shanghai, Singapore, the US, Canada, Japan and South Korea, MiHoyo is so far China’s third largest game publishers as of January 2022 in terms of revenue, behind Tencent and NetEase.

Amid the tight scrutiny of gaming industry at the domestic market, players spending on Tencent’s top-grossing games fell gradually in the quarter.

Revenue for Honour of Kings fell 1 per cent year on year for the quarter, while PUBG Mobile revenue was down 9 per cent. Player spending across all mobile games was down 7.1 per cent to US$21 billion, despite a 2.1 per cent increase in downloads to 14.4 billion.

Since last year, China has been increasing its scrutiny of the country’s gaming industry in an effort to clear up chaos and create a healthier online environment for netizens especially minors.

In a commentary piece, Securties Times, one of China’s influential state newspapers, commented that the regulators should stop offering favorable tax policies to gaming industry as the industry has become more sophisticated and some of the firms has competitive advantages to compete globally.

Securities Times also argue that some big gaming firms should undertake more social responsibilities to protect minors from being addicted to online games and give back some profit to benefit society.

In August 2021, Beijing implemented a new rule that limit gaming time to only three hours per week for minors. In response, many gaming firm’s rollout out facial recognition tools to scan players’ face that restrict kids from playing games at night.

Chinese gaming developers have been shifting its focus to the overseas market for the next chapter of growth, as their local businesses struggle with the more challenging Chinese market amid increasing scrutiny of online games in China.

For example, Tencent built up a matrix of overseas studios through acquisition and heavy investment. NetEase is actively seeking cooperation with global partners that enable it to adapt more popular intellectual property (IP) into games.

“Overseas market will contribute 50% of our gaming revenue in the future, largely increase from only 10% now,” said Hu Zhipeng, vice president at NetEase.