17 Feb 2016
Growth of China's Game Streaming Sector Spurs Industry Shakedown
Valued at some Rmb140.7 billion per annum, China's online game streaming sector is the new digital battleground.
Over the last three years, live streaming platforms have become an increasingly popular part of China's online game market. With huge profits to be made, many of the giants of the digital world are now eying the sector speculatively.
Although the sector is relatively new, a number of brands have already begun to emerge as market leaders, most notably yy.com, douyutv.com, 17173.com, PLU.cn, zhangqi.tv and fengyunlive.com. On its own, one of these streaming platforms – 17173.com – notched up 8.66 million views in July 2014, an 80% 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.
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% increase on the 2014 figure. Over the same period, the number of mainland gamers rose to 534 million, a 3.3% increase.
According to a separate survey, China's Live Streaming Games Market Report 2015, live streaming really only took off for China's gaming industry in 2013. The report, issued by iResearch China, estimated that the number of streaming game players in the country 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 giving users 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 China have adopted a similar model to Twitch, almost replicating its twin subscription options. As well as membership services, mainland companies also look to incentivise gamers by offering free in-game assets (such as weapons and skills). These assets can also be traded in return for higher points or given away to other users in order to secure a number of privileges, such as higher resolution streaming.
In Q4 2015, according to industry statistics, the mainland's live streaming game sector had a turnover of Rmb200 billion. It is such statistics that have led many of the digital giants – both domestic and global – to invest heavily in acquiring the leading game streaming platforms. With many of the industry's big guns now ready to make their play for market domination, the sector is set for a period of rapid change and consolidation.
Rex Shao, Shanghai Office