Chinese online gaming companies staged a strong rally in the A-share market, with an index tracking the sector compiled by Wind Information surging 5.36% to hit a new high for the year. By the market close, all 35 constituent stocks in the index had gained, with 16 stocks jumping more than 5%.
Among the top-performing stocks, Zhejiang Jinke Tom Culture Industry surged by the daily limit of 20%, while Yaoji Technology and Perfect World hit the 10% daily limit. Meanwhile, Fuchun Technology and Ourpalm Co posted gains exceeding 10%.
The National Press and Publication Administration (NPPA) earlier this week released approvals for domestic online games, with a total of 112 titles receiving licenses, including 112 mobile games and 7 PC-based games. In addition, seven imported games were approved.
Guotai Junan Securities said that the number of approved domestic game remained stable month-on-month, while the frequency of imported game approvals increased.
Many gaming companies are expected to release new titles in the fourth quarter of 2024 and 2025, with firms boasting strong content reserves and solid fundamentals likely to recover first, it said.
In the longer term, companies with leading capabilities in game development, publishing, and AI technology applications are expected to see gradual improvements, it added.
Citi Research said that November marked the second time this year that both domestic and imported online games were approved simultaneously.
While the scale of domestic game license approvals remains steady, the pace for imported game approvals has accelerated, deviating from the previous pattern of approvals every two months, it said.
Although the volume of imported games approved this time was relatively small, the increased frequency of approvals suggests a healthier regulatory environment, reflecting positive industry trends, it noted.
So far this year, 1,282 games have been approved, including 1,184 domestic titles and 98 imported ones.
Regarding the future trajectory of the gaming industry, CSC Financial said that the sector is entering a new cycle of product launches and notable upcoming games include Tencent’s Pokémon Unite (ranked 10th in sales charts), NetEase’s Marvel Duel (launching December 6), Perfect World’s Jade Dynasty World (launching December 19), Code DL by Sino Technology, Echo of Aberration distributed by Gigabit, and Infinity Nikki by Paper Games.
Furthermore, opportunities in overseas markets are expanding for domestic game companies. Recently, Meta’s Instant Games platform enabled iOS in-app purchases, opening up monetization ecosystems for overseas mini-games, which could benefit domestic developers. The core advantage of mini-games lies in user acquisition, an area where domestic companies excel, allowing them to better engage players.
Looking ahead to next year, market research firm DFC Intelligence predicts a robust rebound in the gaming industry in 2025, marking a new starting point for the sector and entering a phase of significant growth.
The PC and console game software market will grow by 15% over the next four years, with the market size increasing from $72 billion in 2024 to $83 billion by 2028 and the year 2025 is projected to be a turning point as the industry emerges from its current trough, heralding a strong recovery.