Games, literature see online growth

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After several decades of development, Chinese cultural industries, such as online literature and video games, have created products that enrich global culture with creativity, imagination and local elements, appealing to both domestic consumers and those from overseas.

China's video game industry, after three decades of development, has evolved into a competitive player in the international market, especially in the section of mobile games, driven by the internet and technological advancements.

According to CNG, a research institute on the gaming industry, between 2019 and 2023, the global gaming market grew from $146.2 billion to $184 billion, with a four-year compound annual growth rate, or CAGR, of 5.92 percent.

Notably, the mobile gaming sector had seen significant growth, increasing from $68.7 billion in 2019 to $90.4 billion in 2023, with a four-year CAGR of 7.1 percent.

In comparison, overseas revenue from games independently developed in China had risen from $11.6 billion in 2019 to $16.4 billion in 2023, achieving a four-year CAGR of 9.04 percent.

This growth is primarily attributed to the advantages of Chinese companies in mobile game development and operations.

With the widespread adoption of smartphones and the development of mobile internet technologies, mobile games have become a major part of the global gaming market.

Leveraging their leading technology and extensive experience in this area, Chinese gaming companies have successfully launched a series of popular game products in both domestic and overseas markets.

For instance, due to the great success of Genshin Impact, Shanghai-based game developer miHoYo jumped into the list of top 100 enterprises of 2020 in the city.

In 2023, Genshin Impact became the most lucrative Chinese game in overseas markets. By the end of last year, it had garnered about $5 billion, and players from overseas contributed more than 60 percent of the total, according to data from analytics company Sensor Tower and App Magic.

Since its launch in 2020, Genshin Impact has won the best mobile game award in 2021 and the player's voice award in 2022 at the annual The Game Awards — often dubbed as the "Oscars" of the global gaming industry, while being nominated for the best ongoing award four times.

Overseas revenue

At the end of 2023, at the TGA annual gala, Black Myth: Wukong, a new game from China, captured the world's attention. Developed by Hangzhou-based Game Science, it was slated for release in August. On social media platforms, many people talked about their surprise at the release date, as the trailers looked "so fake" with "gorgeous visuals, incredible character design, nice music", and they "can't wait".

Black Myth symbolized a significant leap forward for China's gaming sector, heralding a new era where advanced technology, innovative gameplay and cultural creativity intersect to redefine gaming experiences and enrich the global game culture, despite the fact that overseas revenues of Chinese game developers have dropped in two consecutive years.

In 2023, although the global market was showing signs of recovery, increasing by 6 percent year-on-year, and the global mobile gaming market grew by nearly 2 percent from the previous year, games developed independently in China garnered nearly $16.4 billion, down 5.65 percent year-on-year. The dropping percentage was even larger than that in 2022.

Statistics from CNG show that in January, the revenue continued to reduce by 3.24 percent compared with December.

One of the reasons for the decline, according to Zhejiang Century Huatong Group, the largest shareholder of Shanda Games, one of the leading game companies in China, is that as other countries and regions pay more attention to the development of the game industry, while increasing support for local industry, they have also tightened regulations on imported products, including entry requirements, privacy protection, and payment compliance.

Besides, as the number of players in mature markets approaches saturation, the cost of acquiring users continues to increase, leading the market to concentrate on high-quality products.

Despite the continuous reduction, overseas markets are key to many Chinese game developers, as domestic regulations started tightening in 2018. For example, in 2022, a regulation was introduced, largely limiting the time for children to play video games.

According to Sensor Tower, 27 Chinese mobile games developers saw their revenue from the overseas market exceed $100 million in 2023. The top 30 Chinese game developers still maintained stable profitability in overseas markets, with total overseas revenue reaching $10.9 billion in 2023, holding steady compared with 2022 and accounting for nearly 18 percent of the total revenue of mobile games in the overseas market.

According to the latest financial report, Tencent's international gaming revenue in Q4 last year hit 13.9 billion yuan ($1.93 billion), totaling 53.2 billion yuan for the year and accounting for 30 percent of its gaming income.

Key contributors included Pubg Mobile, which saw a 27 percent month-on-month overseas revenue increase in December, according to Sensor Tower. Additionally, Honor of Kings has expanded to 57 countries and regions, ranking top 10 in several markets.

Beijing Ultrapower Software, another leading Chinese game company, gained nearly 6 billion yuan in revenue last year, up more than 24 percent. With games such as Age of Z Origins and War and Order, its overseas revenues accounted for about 90 percent of the total of game section.

Technology and culture

According to the 2023 Chinese Games Overseas Research Report, in response to overseas market pressures, 63.6 percent of companies are focusing on long-term product strategies. Over 40 percent see acquiring global intellectual property, diversifying game types, exploring new gameplay mechanics, and external collaborations as crucial breakthrough strategies.

Many also emphasize the importance of incorporating diverse cultural themes, enhancing localization efforts, broadening marketing approaches, and the application of cutting-edge technology.

Liu Wei, chairman of miHoYo, describes his company's trajectory as a blend of "technology innovation and cultural creation".

Tencent's senior vice-president Ma Xiaoyi emphasizes: "Gaming is not an industry that grows in isolation. Since its inception, it has always evolved in tandem with cutting-edge technology."

Game engineers now have access to a plethora of advanced visual technologies, allowing for the vivid portrayal of imagined worlds.

Black Myth: Wukong, for example, features meticulously modeled and optimized renditions of real-world ancient temples, such as the Dule Temple in Tianjin's Jixian county, bringing these cultural heritage sites to life within the digital realm.

"Games can be seen as super-digital scenes that amalgamate cutting-edge technology with cultural achievements, offering new possibilities for the restoration, protection, and interpretation of cultural heritage," says Zheng Han, an associate professor at Wuhan University's School of Information Management in Hubei province, in a previous interview.

In addition to advanced technology, Chinese local culture has also become a selling point on the global stage, bringing fresh experience for international players and enriching global game culture.

Recent surveys conducted by the China Audio-Video Digital Publishing Association's Game Committee revealed the embrace of traditional Chinese culture in game development, with 84 percent of Chinese game enterprises incorporating traditional characters in game character design and 98 percent utilizing traditional cultural elements in game environments and item designs.

For example, Century Huatong's Shengqu Games has been developing titles like Lianpu (opera makeups) and Yueshen Qu (music of gods), all of which integrate China's intangible cultural heritage into their gameplay.

On the international stage, hit titles like Honor of Kings, Peacekeeper Elite, and Genshin Impact have woven a rich tapestry of Chinese elements and traditions into their design, drawing heavily on classical Chinese poetry, mythology, music, martial arts, folk games and traditional art.

These games serve not only as a digital repository of Chinese culture but also as a bridge for international cultural exchange and cooperation.

Increasing influence

Another notable cultural industry that has been getting more attention from overseas is online literature.

After more than 20 years of development, Chinese online literature has become a foundation for the prosperous development of downstream industries, such as publications, TV dramas, films, video games, audiobooks, and cultural creative products in the country. Now this development mode has also been copied in the international market.

According to statistics by Chinese Academy of Social Sciences, in 2023, the market value of Chinese online literature had reached 40.4 billion yuan, up 3.8 percent year-on-year, while the market value of intellectual property in Chinese online literature jumped to 260 billion yuan.

Overseas market value of Chinese online literature has surpassed 4 billion yuan.

Web Novel, an overseas online platform of China Literature Group, attracted 230 million users from more than 200 countries and regions, with users from the United States being the most numerous.

By the end of 2023, Web Novel launched about 3,800 novels translated from Chinese, up 31 percent compared with the previous year.

Apart from translations, works from the international platforms of Chinese online literature have been published by overseas publishers and been adapted into manga, cartoon and audio works that have attracted millions of users worldwide.

Chinese online literature companies, including China Literature Group, have cooperated with overseas publishers such as Penguin Random, Amarin and Libre, selling digital and print copyrights of about 2,000 novels to Japan, South Korea, Southeast Asia, Europe and North America, involving more than 20 languages, including English, French, German, Russian, Japanese, Korean, Vietnamese, Turkish and Portuguese.

More than 1,500 manga works, and over 100 audiobooks, adapted from works from those platforms, were launched overseas last year.

For example, the audiobook of My Vampire System had been played more than 30 million times, covering many English- and Indo-European-speaking countries and regions.

Since China Literature Group registered its YouTube channel in September 2022, it has released one episode of each cartoon adaptation of online novels, such as Battle Through the Heavens, Martial Universe and Stellar Transformation.

Now the channel has been subscribed by more than 1 million viewers who hit the channel more than 270 million times.

Translation with AI

In 2017, to provide solutions to the translation of literary works, Funstory.ai was founded to develop artificial intelligence-assisted translation and production system targeting literature. So far, the company has helped translate more than 7,000 online novels with AI.

At the end of 2019, Web Novel started posting online novels translated by AI and launched the function that allows users to revise the translation, which can help to upgrade AI. Since 2023, Web Novel kept advancing the translation mode which is a cooperation of human and machine.

Works translated in this mode like the English translation of Chinese online novel Mythical Era: I Evolved into a Stellar-Level Beast soon became hits.

Now with AI, Web Novel can translate works into English, Spanish, Indonesian, Portuguese, German, French and Japanese, from not only Chinese, but also other languages.

Tong Ye, chief executive officer of Funstory.ai, says AI can make translation 3,600 times more efficient, and cut down cost by 99 percent.

As multiple books have become top best-sellers on Web Novel, it can be said the translation quality is quite good, according to a recent report by the Chinese Academy of Social Sciences.

By October 2023, 238 works on Web Novel had been hit over 10 million times each, among which nine translation works, including Full Marks Hidden Marriage, Release That Witch and The King's Avatar, had been hit more than 100 million times each.

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