Asia Spotlight Report: The Impact of COVID-19 on China’s Video Game Market in Q1 2020

The video game market in China experienced a significant surge in engagement and revenue during the first quarter of 2020, driven by widespread stay-at-home mandates during the COVID-19 pandemic. Total industry revenue for the quarter is estimated to have been approximately 30% higher than in the same period of 2019. This growth was characterized by increased mobile, PC, and console usage, as gamers sought entertainment and social connection during prolonged quarantine periods.

Key findings from an April 2020 survey of 1,057 Chinese gamers highlight the depth of this shift: 97.2% of respondents reported spending more time on mobile games, while 94.6% increased their time on PC titles. Spending also rose, with 81.6% of mobile gamers and 76.3% of PC gamers reporting higher expenditures during the lockdown. While major titles from publishers like Tencent and NetEase dominated the market, the period also saw a notable decline in the internet cafe sector, which was forced to close entirely. Survey data suggests a lasting impact on consumer behavior, as 57% of former internet cafe users indicated they do not intend to return to those venues once reopened.

The pandemic also forced a rapid evolution in industry operations, particularly within the esports and development sectors. Esports tournaments successfully migrated to online formats, supported by municipal government initiatives to reduce regulatory barriers. Conversely, game development and outsourcing studios faced productivity challenges, leading to project delays for some global titles. While the surge in home-based gaming provided a substantial revenue boost, the industry faced headwinds regarding hardware manufacturing, component scarcity, and a decline in advertising revenue for smaller, ad-supported titles. Overall, the period solidified gaming as a primary social and entertainment outlet for Chinese consumers, with many users reporting a newfound acceptance of gaming within their households.