China's digital games market booming

Industry insiders said China's mobile games market will record a compound annual growth rate of about 30 percent in the coming years, much higher than that of Web-based games.

Yao said as users' playing habits evolve, they are willing to pay and play games that challenge and stimulate them. Such players are not always looking for free games.

This has created a big business opportunity for mobile games companies such as Feiyu. It has developed some mobile games products, including Carrot Fantasy, Plump Fish and Beauty Warriors, for both iOs and Android users.

The digital games sector in China is powered by more than 20,000 game developers. As of August 2015, they had developed more than 20,000 types of games, according to industry figures.

There are 171 listed games companies with a collective market value of 4.76 trillion yuan. Such staggering growth came on the back of the government's decision to simplify procedures related to registration and operations of such firms.

Last year, the State Administration of Press, Publication, Radio, Film and Television shortened the period of approvals for new games, which are treated as mass media content.

Not just mobile games, even the emerging e-sports may have reaped $250 million in sales worldwide in 2015, according to Newzoo. China's e-sports were expected to earn a revenue of $36.7 million for 2015, which would put the country on top of all Asian markets.

In response, the government has taken steps to stimulate development of the e-sports market. In January, the China Culture and Entertainment Industry Association, which is overseen by the Ministry of Culture, established an e-sports branch to fully develop competitive digital games products, explore recreation and entertainment places, and conceptualize e-sports events.

Going forward, competition in the digital games market will intensify, which could lead to a shakeout and mergers of small and medium-sized games companies, especially in the mobile games segment, according to Niko Partners, a market consultancy focused on digital games in Asia.

Agreed Xue of Analysys. He estimated the growth of the games market will slow.

"Owing to rising costs, some small companies will exit the market, and big companies like Tencent Holdings Ltd will become industry leaders."

Niko forecast that Internet giant Tencent will likely dominate the games market, although Web portal NetEase.com Inc is turning out to be a strong challenger. Besides, other games developers are readying to raise investments to grab a larger market share.

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