What We Know About China's Youth Video Game Market

In July 2022, Niko Partners - a firm specializing in research on electronic entertainment in Asia and Oceania - released a report on the youth video game market in the People's Republic of China. Ordinarily this would be a fairly niche report of interest only to certain industry insiders, but coming as it did a year after China instituted a new policy restricting play time for minors, it garnered broader interest.

To refresh your memory: The policy restricts people under eighteen years old to three hours of gameplay per week, restricted to specified hours on weekends and public holidays. This is enforced via ID requirements, with youth accounts being more heavily restricted. Based on the report, the policy - while fairly porous - has had quite an impact. The number of Chinese minors who play video games at all declined by nearly a third, while three-quarters of the rest reported playing less.

A few takeaways from the public report:

• 29% of young people exceed the 3 hour limit per week, mostly due to parents using their own IDs. A lot of people anticipated this. Chinese parents monitor their children's activities far more closely than most American parents, so this policy was always largely symbolic. Nevertheless, a majority of youths - even those who exceed the limit - play games less frequently now than they did prior to the policy.
• Video game use is concentrated among junior high school students, with a decline among those in senior high school. This is maybe the least surprising takeaway from the report. The Chinese testing regime - particularly the gaokao, the national college entrance exam - is notoriously brutal. Many of my students compared high school to prison, noting long hours both in regular class and after-school classes (combined, these can run to twelve hours a day) along with a heavy homework burden. This leaves little time for any sort of hobbies at all. Nevertheless, Niko suggests that 62% of high school students play video games, a number that strikes me as surprisingly high.
• Play is overwhelmingly on mobile devices, with 86% on mobile versus 30% on PC. It's worth noting that unlike most Western nations, it is not standard for Chinese youths to own smartphones or similar devices. Most will have either a watch-like monitoring device (mostly for younger children) or a simple device with talk, text, and possibly GPS functionality. Many will not possess a device capable of playing games until high school or even college.
• Only 6% report playing games on a console. Even this long after the end of the import freeze, video game consoles are still rare and expensive in China. The country really doesn't have large electronics retailers, and big box stores don't carry consoles. For the most part, official consoles (i.e. ones you've heard of) can only be obtained at small specialty stores that, in most cases, sell nothing else. Many malls contain Nintendo or Sony stores that only sell a console and its accessories.

So what does this mean for the video game market as a whole? China is definitely going to remain important on the global scene, even if the consumers will have to wait a little bit longer. The country's overall size, large population of internet users, growing affluence and prominence on the competitive circuits mean that video game developers will have to keep China in mind going forward. And with the government ending the game licensing freeze in April, that market is set to keep growing. Even Niko anticipate a significant rebound in the coming years as the Chinese market returns to its pre-policy size.

But on a personal level, I seriously doubt that this is the last time the Chinese government will interfere in the market. In the PRC, there is no aspect of commerce that is immune to the influence of politics. When it comes to entertainment, that can have a real ripple effect beyond the country's borders. As we watch the video game industry shift, it's worth keeping an eye on China - it has an impact.

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