China’s video gaming crackdown: 2021 revenue growth slows sharply amid teenage play limits and new licence suspensions

China’s video games market had its slowest revenue growth in three years in 2021 amid Beijing’s crackdown on the industry while the number of players stagnated, according to an industry report released on Thursday.

According to the report released by the Game Publishing Committee (GPC) of the China Audio-Video and Digital Publishing Association, China’s state-backed gaming industry association, the industry’s gross sales revenue grew 6.4 per cent in 2021 from a year ago, a sharp reduction from last year’s 20.7 per cent growth.

The number of gamers in China also plateaued, with the number of gamers rising by just 0.22 per cent to 66.6 million gamers this year compared with growth of 3.7 per cent in 2020, according to the report. The GPC report was released at the annual China Game Industry Annual Conference, attended by regulators and company representatives.

The significantly slower growth comes after Chinese regulators moved to ban teenagers under 18 from playing video games for more than three hours a week in August, which came with a licence freeze for new video games in the country around the same time. Beijing signalled it wants to prevent gaming addiction and promote positive content among the nation’s youth.

Total revenue in China’s gaming market – the world’s biggest – reached 296.5 billion yuan (US$46.6 billion) in 2021, with Tencent Holdings, NetEase and ByteDance all jostling for a slice of the pie. But the sales growth rate in 2021 was the slowest since 2018, when regulators froze new game licence approvals for nine months.