It was last year this month that the Xi Jinping government in China started a crackdown on the gaming industry by describing video games as ‘spiritual opium’. A year on and China’s biggest technology giant, Tencent Holdings is mulling venturing overseas.
Reportedly, during the Tencent Game Developers Conference that started on Sunday this week, the Shenzhen-based company highlighted the opportunities that lay outside mainland China, both for its in-house IPs and products developed by other Chinese developers.
Xia Lin, vice-president of Tencent Games stated that the Chinese games had a vast growth potential in markets like Southeast Asia, West Asia as well as Latin America.
Lin further added that the ‘sheer’ number of users and game downloads from the aforementioned regions had dwarfed the demand of the Chinese market.
Tencent’s overseas revenue has grown by four per cent to $1.56 billion in the first quarter of the year. Meanwhile, the revenue on the domestic front fell by one per cent.
Moreover, owing to the gaming restrictions, the Chinese regulators are yet to secure a single licence to develop and publish new games. Earlier this month, 69 video game licenses were distributed but not a single one went Tencent’s way.
Xi Jinping’s crusade to neuter the tech sector
As reported extensively by WION, last year, Xi Jinping, on his crusade to teach the tech sector a lesson, went after nearly every big company. While Alibaba’s Jack Ma mysteriously disappeared from the public eye for several weeks and the company’s IPO tanked, Tencent and its fortunes were tied in a cul-de-sac as the CCP came riding with its restrictive laws.
Read More: Three hours a week: China’s new rules for children playing video games
Reportedly, under the restrictions, anyone under 18 years old can only play video games three hours a week, or one hour per day at 8 PM on Fridays through Sundays, that is, the weeknights. The restrictions came into force in September 2021 and since then, they have remained in effect.
According to the Game Publishing Committee of the China Audio-Video and Digital Publishing Association, the total number of gamers in China fell for the first time since 2015 to 665.69 million from 665.57 million. Meanwhile, the industry’s revenue dropped 1.8 per cent to $21.9 billion in the first six months of the year, compared to the same period last year.
The numbers may not look astronomical but the fact that China’s once booming gaming industry is showing signs of a slowdown has given Tencent, the world’s largest video gaming business by revenue, a reason enough to pivot overseas.
(With inputs from agencies)
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