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Streaming Profits

Over the last three years, live-streaming platforms have become increasingly popular in the Chinese mainland’s online gaming market. With huge profits to be made, many online digital giants are now eyeing the sector.

While digital gaming is relatively new, several companies have already begun to emerge as market leaders, most notably yy.com, douyutv.com, 17173.com, PLU.cn, zhangqi.tv and fengyunlive.com. One of these streaming platforms alone – 17173.com – notched up 8.66 million views in July 2014, an 80 per cent increase over its figure for January of the same year.

Given this level of popularity – and the high level of profits involved – new players will inevitably enter the field. It is anticipated that, after a period of market saturation, the less competitive businesses will be driven from the sector.

Growth of Online Gaming

According to the China Gaming Industry Report 2015, the total sales revenue of China's gaming market was Rmb140.7 billion last year, a 22.9 per cent increase on the 2014 figure. Over the same period, the number of mainland gamers rose to 534 million, a 3.3 per cent increase.

In a separate survey by China's Live Streaming Games Market Report 2015, live-streaming really only took off in the country in 2013. The report, issued by iResearch China, estimated that the number of streaming game players in the mainland will top the 100 million mark in 2016, creating a sector worth some Rmb5 billion.

Typically, the revenue of live-streaming game platforms is derived from online ads and subscription payments. In the case of Twitch, Amazon's dedicated online gaming site, the platform offers both subscriptions to individual channels as well as the option to sign up for Turbo, its premium service. This high-end option gives subscribers an ad-free viewing experience, customised avatars, and other in-game benefits.

Game-streaming services in the mainland have adopted a similar model to Twitch, nearly replicating its twin subscription options. Apart from membership services, mainland companies also look to incentivise gamers by offering free in-game assets (such as weapons and skills), which can also be traded in return for higher points that can also be given away to other users in order to secure privileges, such as higher resolution streaming.

According to industry statistics, the mainland's live-streaming game sector in the fourth quarter of 2015 saw a turnover of Rmb200 billion. Such statistics have led many of the digital giants – both domestic and global – to invest heavily in acquiring leading game-streaming platforms. With many industry big guns now ready to make their play for market domination, the sector is set for a period of rapid change and consolidation.

For more China market opportunities, please visit: http://research.hktdc.com

Content provided by Hong Kong Trade Development Council
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