Challenging but promising

Although the worldwide gaming industry is flourishing overall, many challenges are weighing on Chinese gaming companies' dreams of going global.

They include limited overseas marketing budgets, localization challenges caused by companies' unfamiliarity with policies, cultural differences and privacy policies, among others, experts said.

In the first half, China's self-developed games recorded total actual sales revenue of $8.2 billion, down 8.72 percent year-on-year, according to a report released during ChinaJoy on July 27.

Experts attributed the decrease to diminished consumer willingness to spend, as well as increasing marketing costs brought on by international conflicts, exchange rate instability and strong market competition.

Similarly, AppsFlyer conducted an analysis of over 17,000 Chinese gaming apps over an 18-month period, from the start of 2022 to this June. The results showed that the downtrend of Chinese games' installation had aligned with the sluggish global economic performance in the first six months.

"The slowing economic growth led to falling marketing budgets among game developers, while overseas media buying costs have risen by as much as 30 percent," said Peter Wei, senior vice-president of the Growth Business Center at Mobvista, a leading Chinese mobile marketing platform specialized in global growth for game developers.

Thus, how to target the most potential users with limited budgets in diverse overseas markets is a major and crucial challenge for Chinese game developers, Wei said.

Privacy policy updates also have a crucial impact on the gaming industry, especially on mobile games.

In recent years, Apple's App Store has been tightening its user privacy policy, focusing on aspects such as data collection and requirements on anti-tracking measures. Furthermore, Google is also rolling out its Privacy Sandbox, which will make it harder for game developers and marketers to target their users, said Wang from AppsFlyer.

Despite the challenges, the global gaming industry still offers eye-catching growth in different regions, as per AppsFlyer's report.

In North America, games using the Android system saw a total growth of 56 percent from the start of 2022 to this June, led by children's games and sports games. In Japan and South Korea, in-app purchases on social apps from the iOS App Store surged 120 percent. In Latin America, all game categories were seeing growth. The African gaming market also saw rapid growth and has a promising future, said the report.

"Nevertheless, big challenges could turn into vast opportunities. The most important thing for Chinese game developers is to adapt to the changing environment," Wang said. "The one who adapts to the new environment the best will get through the hard times and then perform better."

Alan Lan, managing director of Greater China at X Corp, also said he is fully confident about the overseas expansion of the Chinese gaming industry.

"We firmly believe that innovation and resilience will enable Chinese game makers to traverse the downtrend cycles faster, and achieve long-lasting success in the global gaming market competition," Lan said.

Wang Xin in Shanghai contributed to this story.