Reports

China's mobile gaming market - including revenues from both single-player and multi-player games - increased approximately 45% YoY to reach roughly RMB 113 billion (USD 16.8 billion) in 2017. In 2017, mobile games adapted from popular IP (e.g. films, novels, PC games, and comics), and acceleration in the uptake of mobile e-sports and virtual reality-based games continued to buoy market growth.

Mobile gaming-related M&A deals in Q3 2018 focused heavily on the domestic market, with at least 12 major domestic mobile gaming M&A or venture financing deals announced during the quarter. Multiple major Chinese mobile gaming firms also went public or issued IPO prospectuses during the period. The number of investments in overseas mobile gaming or sector-related firms was much more modest than in quarters past, but did include a strategic partnership between Tencent and Japan's Square Enix to jointly develop high-budget, heavily marketed games based on original intellectual property, and to cross-license existing intellectual properties. As the new video game approval process in China has stalled since a regulatory agency restructuring began in late-March, we expect to see overseas expansion efforts ratchet up in the quarters ahead.

During the quarter, mobile gaming companies also continued to expand aggressively into other complementary sectors through the acquisition of stakes in blockchain, e-sports training, and education firms.

The regulatory environment for mobile gaming in China grew considerably more restrictive in Q3 2018, including not only the ongoing freeze on approval to monetize new titles mentioned above, but also a series of new measures aimed at protecting gamers - particularly minors - from game addiction, myopia, and the culturally negative impact of exposure to themes that are excessively violent, lurid, or gambling-related. The new rules, depending on how they are implemented and enforced, have the potential to significantly impact gaming revenues by capping the number of games that can be released and placing limits on total play time, marketing channels, and other areas.

To help investors and game industry enterprises identify opportunities among China's sea of mobile game titles, developers, and publishers, Marbridge has developed the Chinese Mobile Gaming Industry Matrix. The Q3 2018 edition of the Matrix provides details, in Excel (read-only) format, on:

Leading Mobile Game Companies (700)

• Listing Status (public, to list, private)
• Location (city in which operator/developer is headquartered)
• Company Homepage URL
• Company Contact Phone Number
• Experience in Overseas Game Publishing (specific examples available for ~6% of companies)
• Games Operated/Developed (with top grossing games highlighted)

Top Mobile Games (2,085)

• Game Environment (Android, iOS, WP)
• Game Type
• Game Dates (expected release, beta test, commercial launch)
• Game Source (self-developed vs. licensed)
• Revenue Model (pay-to-play vs. in-game items)
• Game Operation Statistics (DAU, monthly revenue, cumulative downloads - as available)
• Game Homepage URL

Industry News Summaries - Q3 2018

• M&A and Internal Investment Deals (18 items)
• Partnerships (1 item)

Regulatory Announcements - Q3 2018

• Overview / Impact
• Announcement Date
• Implementation Date