Industries and sectors
China's Gaming Industry: Market Size, Rules and Growth Opportunities
China is the world's largest games market, home to Genshin Impact and Black Myth: Wukong. Here is how the industry works, what the licensing rules are, and where a Gulf business can take part.
作者：萨米·哈吉里阅读约需 7 分钟
Your customers in Riyadh, Kuwait or Dubai already play Chinese games, often without knowing it. China's gaming industry has grown into the largest in the world, and its studios now look abroad for players, partners and publishers. By the end of this guide you will know how the market developed, where Chinese developers are strong and weak, what the licensing rules mean for foreigners, and which openings suit a Gulf business.
How big is China's gaming industry?
China's gaming industry has grown very fast in recent years. Free-to-play online games such as Genshin Impact and Wuthering Waves have millions of players worldwide, and others such as Etheria: Restart have been preparing for full launch. China had 668 million players by the end of 2023 and in 2024 overtook the United States as the world's largest video game market. The wider numbers, including revenue forecasts to 2028, are set out in our guide to China's entertainment and media industry.
For a Gulf reader, the scale matters for one reason: Chinese studios have money, experience and a need to grow outside a crowded home market. The Middle East, with young, high-spending players, is one of the regions they target.
Why free-to-play dominated, and why that is changing
Piracy shaped the business model
Chinese developers were long hesitant to make single-player, pay-once games. The cost of producing a paid standalone title is high, and free-to-play games made a better commercial case. A developer named Zhou traces this to 1995, when the Legend of Sword and Fairy series launched. The series was popular, but piracy was so widespread that the market for paid standalone games could not survive. Studios moved to online games that earn from in-game purchases, which pirates cannot copy, and that model became the standard for decades.
Black Myth: Wukong proved paid games can sell
The picture changed in August 2024. Black Myth: Wukong sold 10 million copies in less than a week after release and was later named Game of the Year at the 2024 Steam Awards. Its success showed Chinese investors that a large, story-driven game made in China can earn at global scale, and more studios are now working on premium titles.
Where Chinese developers lead and where they fall short
Industry experts agree that Chinese developers have clear strengths and some known gaps. Knowing both helps you choose what to buy from them and what to bring yourself.
- Strength: after years of free-to-play games, Chinese companies lead the world in commercial design and live operations.
- Strength: they excel at monetisation models, balancing in-game economies and guiding player behaviour.
- Weakness: game design and overall quality can fall short, especially in narrative and script writing.
- Weakness: the industry still has limited experience in standalone game design, gaps in market insight and too little exchange with the wider industry.
That gap in market insight is where a Gulf partner adds value. Chinese studios rarely understand Arabic players, local payment habits or cultural sensitivities, and they know it.
Licensing and government support
The NPPA licence
Most games released in China need a licence from the National Press and Publication Administration (NPPA). The key steps are content review and technical compliance. Approvals are issued in batches, and waiting times vary. Foreign games need a separate import approval, and they are normally published through a licensed Chinese company. China also restricts foreign ownership of online publishing, so a foreign firm cannot simply set up a studio and publish directly to Chinese players.
Local incentives
Regional policy plays a large role. The Sichuan provincial government has been very supportive of game development, and depending on local rules, incentives can include tax exemptions for cultural projects or grants for technology and research and development. Other cities, including Shanghai, Shenzhen and Hangzhou, run their own programmes. Ask the local investment bureau for the current terms in writing before you decide where to set up.
Opportunities for Gulf businesses
Publishing and localisation for Arabic players
Chinese studios want regional publishers who can translate, localise, market and run customer service in Arabic. The strongest deals give you exclusive rights for the Middle East and North Africa for a set period, with a revenue share and clear targets. Check who owns the game's rights outside China before you negotiate; some titles are already licensed to a global publisher.
Budget for the real work of localisation. Arabic text runs right to left, so menus, fonts and chat need engineering work, not only translation. Voice-over, cultural review of characters and symbols, and age rating by the relevant regulator, such as Saudi Arabia's media authority, all take time. Plan 3 to 6 months from signed contract to regional launch for a mid-sized mobile game. Offer the payment methods Gulf players use: app store billing, local cards, mobile carrier billing and gift cards sold in shops.
Gaming hardware and accessories
Shenzhen and Dongguan make most of the world's gaming peripherals: headsets, keyboards, mice, controllers, gaming chairs, monitors and PC cases. Guangzhou's Panyu district supplies arcade machines and entertainment centre equipment. MOQs for branded peripherals often start at 500 to 1000 units per model, lower for stock designs. A product sourcing service can compare factories and check samples before you commit.
Production of peripherals usually takes 25 to 40 days after sample approval, and sea transit from Shenzhen to Jebel Ali or Dammam takes 18 to 30 days. Wireless controllers and headsets contain lithium batteries, so they must be declared and packed as dangerous goods. Ask for the certificates your market requires, such as radio approval for wireless devices, before production, not after the goods arrive.
Esports and events
Esports became medal events at the 2023 Asian Games in Hangzhou, and Saudi Arabia now hosts major tournaments in Riyadh. Chinese teams, tournament organisers and broadcasting technology firms look for Gulf partners for venues, sponsorship and production. China's technology base behind this is covered in investment opportunities in China's technology sector.
How to start working with Chinese game companies
- Choose your role: publisher, hardware importer, investor or event partner. Each needs different contacts and contracts.
- Build a shortlist. Visit ChinaJoy in Shanghai, held each summer, or study studios active on global app stores and Steam.
- Ask for proof of rights. For publishing, confirm who holds rights in your region; for hardware, ask for test reports and certificates for your market.
- Register your brand in China before you share designs or names, because China grants trademarks to the first filer.
- Start with a limited deal: one title, one region or one product line, with measurable targets over 6 to 12 months.
- Put the contract under a neutral law and arbitration seat, such as Hong Kong or Singapore, and set payment and reporting terms clearly.
Protect your name first with trademark registration in China, including a Chinese-character version if you plan to sell there.
Common mistakes
- Signing a publishing deal without confirming who holds the rights in the Middle East.
- Assuming a foreign company can publish games directly to Chinese players without a licensed local partner.
- Buying peripherals on price alone without checking certification for your market and warranty support.
- Localising only the language and ignoring cultural review, which can get a game removed from regional app stores.
- Relying on a studio's download figures without seeing revenue data for comparable regions.
What to do next
Experts remain optimistic about China's gaming industry. Challenges remain, including limited experience with standalone games and caution about launch-day revenue, but as an expert named Shen puts it, more entrants and growing demand for high-quality content will keep driving growth. This week, pick your role, list five Chinese studios or factories that fit it, and send each a short introduction with your market data. If you plan to meet them in person, HiGreenPanda can arrange trade fair accompaniment at ChinaJoy and factory visits in Shenzhen. File your trademark before the first meeting.
本文解答的问题
Is China the largest gaming market in the world?
Yes. China overtook the United States in 2024 to become the world's largest video game market, with 668 million players by the end of 2023. Free-to-play online games make up most of its revenue.
Why are most Chinese games free-to-play?
Piracy in the 1990s made paid standalone games hard to sell, so studios moved to online games that earn from in-game purchases. That model became the standard, and Chinese companies now lead the world in monetisation and live operations.
How successful was Black Myth: Wukong?
Black Myth: Wukong sold 10 million copies in less than a week after its release in August 2024. It was later named Game of the Year at the 2024 Steam Awards, and it encouraged more Chinese studios to invest in premium games.
Do games need a licence to be released in China?
Most do. The National Press and Publication Administration reviews content and technical compliance before issuing a licence. Foreign games need import approval and are normally published through a licensed Chinese company.
How can a Gulf company work with Chinese game studios?
Common routes are regional publishing and Arabic localisation, importing gaming hardware, investing in studios, and partnering on esports events. Start with a limited deal, confirm who holds the rights in your region, and register your trademark in China first.
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