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China’s Top 6 Online Gaming Companies Pulled in Over $2 Billion in Q1

China’s Top 6 Online Gaming Companies Pulled in Over $2 Billion in Q1

| May 30, 2013

 

Now that everyone has posted their first quarter financials for this year we can see how much China’s web giants are making out of gaming. The top six gaming companies in China pulled in just over $2 billion in revenues in Q1 to set, as expected, yet another record for this lucrative market. The six market leaders are, in descending order: Tencent (HKG:0700), Netease (NASDAQ:NTES), Changyou (NASDAQ:CYOU), Shanda Games (NASDAQ:GAME), Perfect World (NASDAQ:PWRD), and Giant (NYSE:GA).

Covering everything from MMORPGs to cutesy casual games, their gaming transactions total for Q1 was RMB 12.8 billion, which is $2.07 billion. In contrast, statistics (from a different source) for the same point last year show that the entire industry in China was worth $1.78 billion. So that’s some stellar growth. Here are the Q1 2013 standings:

China online gaming revenue in Q1 2013, graph

Not a ‘perfect world’

Of course, not everyone fared equally well in the online gaming sector recently. Looking at game revenue growth or declines (see graph below), we see that Perfect World and Shanda Games fared badly and were the only ones in the top six to see income drop.

Why the drop in revenues? After all, Q1 should be the time that all gaming companies see a huge boost from students having as much as three weeks off school for the Chinese New Year holidays. Aside from boardroom upheavals at Giant that might be causing it to run inefficiently, both Shanda and Perfect World aren’t in the best cycle of gaming releases right now, and the companies claim to be spending more on R&D to push out new games in China and overseas markets. Perfect World operates DOTA 2 in China and is prepping the distribution of Cryptic Studios’ Neverwinter. As for Shanda Games, it’s seeing its MMOs tanking once again (MMOs in particular are down 28 percent year-on-year) and is trying to diversify with more mobile games for both the Chinese and Korean markets Shanda is also awaiting some payback from new launches such as Dragon Nest and Dungeon Striker. Interestingly, both of the losers also have the lowest profit margins among these half dozen gaming titans. These are the risers and dippers in the past year in terms of gaming income:

China online gaming revenue in Q1 2013

Tencent does a lot more than just online gaming, so it’s total revenues across social media, e-commerce, gaming, online ads, etc., for Q1 2013 were an astronomical $2.161 billion.

(Source: QQ Tech – article in Chinese)

 

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