2025-12-30 14:41Summary of the China Online Gaming Industry Report Industry Overview - The report discusses the China Online Gaming Industry and highlights trends and market performance for 2025, as presented by CNG during the 2025 China Online Gaming Industry Conference in Shanghai on December 19, 2025 [1][2]. Key Trends Identified 1. High-Quality Development: Supported by favorable policies, contributing to market growth [1]. 2. Healthy Domestic Market Growth: Driven by innovation and evergreen operations [1]. 3. Robust Overseas Market Growth: Particularly for self-developed games [1]. 4. Generative AI Adoption: Increasing usage in gaming interactions [1]. 5. Strengthening Social Values: Empowering the digital economy through gaming [1]. 6. Minor Protection Measures: Effective strategies in place to protect younger gamers [1]. 7. Gaming Education: Inclusion of gaming professions in senior education to foster talent development [1]. Market Performance - Market Size: In 2025, China's online gaming market reached Rmb350.8 billion, a 7.68% year-over-year increase, marking a historical high [2]. - Gamer Base: Total gamers in China reached 683 million, up 1.35% year-over-year, with a monthly ARPU of Rmb42.8, reflecting a 6.2% increase [2]. - Domestic Game Market: In-house developed games generated Rmb291.1 billion, growing 11.6% year-over-year [2]. Mobile Gaming Insights - Mobile Games Growth: Increased by 7.9% year-over-year to Rmb257.1 billion, accounting for 73.3% of the market share [3]. - Top Genres: RPGs made up 20%, strategy games 11%, and card games 8% of the top 100 mobile games [3]. - Mini Games: The mini game market grew 34.4% year-over-year to Rmb53.5 billion, with in-app purchases contributing 68% of the revenue mix [5]. PC and Console Gaming - PC Games: Grew 15.0% year-over-year to Rmb78.2 billion, driven by evergreen titles and cross-platform launches [6]. - Console Games: Experienced significant growth of 86.3% year-over-year to Rmb8.4 billion [6]. - Web Games: Continued decline, shrinking 6.7% year-over-year to Rmb4.3 billion, marking the tenth consecutive year of decline [6]. Overseas Market Performance - Overseas Revenues: Grew 10.2% year-over-year to US$20.5 billion, with the US, Japan, and South Korea being the top markets [7]. Company Valuations and Recommendations - Century Huatong: Target price set at Rmb22.0, based on a 20x PE for 2026, reflecting its position as the third-largest online game company in China [9]. - NetEase: Target price of US$161, using a sum-of-the-parts valuation [11]. - Tencent Holdings: Target price of HK$751, based on a SOTP approach with various segments contributing to the valuation [13]. Risks Identified - Century Huatong: Risks include delayed game launches and a slowdown in the auto parts business [10]. - NetEase: Risks involve potential slowdowns in core titles and advertising demand [12]. - Tencent: Risks include revenue slowdowns in PC games, unsuccessful mobile game launches, and economic downturns affecting advertising demand [14]. Conclusion - The China online gaming industry is poised for sustainable growth, driven by innovation, policy support, and expanding overseas markets. Key players like Tencent, NetEase, and Century Huatong are recommended for investment, with specific target prices and associated risks outlined for each company.