CHINA MOBILE GAMES REPORT H1 2021 - In association with: Nativex
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CHINA MOBILE GAMES REPORT H1 2021 How China’s Mobile Habits Have Changed Post-Lockdown In association with:
CONTENTS
CONTENTS
CONTENTS
CONTENTS
01 FOREWORD
02 OVERVIEW OF MOBILE INTERNET USERS IN CHINA
China’s Mobile Internet User Base
Mobile Internet User Distribution Across City Tiers
Average Time of Daily App Usage per Mobile Internet User
07 OVERVIEW OF CHINA’S MOBILE GAMES MARKET
China’s Game User Base and Growth Rate
Actual Sales Revenue and Growth Rate of China’s
Mobile Game Market
11 CHINA MOBILE GAMES MARKET USER
ACQUISITION TRENDS REPORT
12 Overview
Trend of the number of games running UA campaigns
Rate of new games on the UA market
Activation rate
16 The Impact of iOS 14.5
Percentage of devices with iOS 14.5 that have opted out of IDFA
iOS 14.5 adoption rate
Monthly distribution of paying devices across Android & iOS
18 Genre-Specific Trends
Ad spending distribution by genre
Monthly new mobile game releases by genre
Ad spending trends
21 Trends of Ad Creatives for Games
Video ads proportion
Video ads vs. Image ads
FOREWORD
There is real hope that there is light at the end of the
tunnel where Coronavirus is concerned. Societies
across the globe are opening up again – not least
China’s, with many slowly easing back to a pre-
pandemic way of life since the turn of the year.
What impact will a return to normality have on the
country’s mobile scene, though? Throughout 2020,
and during the heights of lockdown, many turned
to their mobiles and mobile gaming to pass the time.
As a result, 2020 was a year of boom for China’s
mobile scene. Mobile developers and publishers
found new audiences and explored new mobile
advertising possibilities.
There was a concern amongst them, too. Could they
keep these new audiences interested when ‘stay-at-
home’ orders were eased? Would China’s citizens
still maintain their newfound mobile usage habits?
How would other external factors such as regulation
impact the mobile market in conjunction with society
reopening?
This mobile games report takes a look at China’s
mobile usage data over the course of H1 2021, drawing
on a variety of different sources and comparisons
to answer those questions and more. We hope you
enjoy.
01
OVERVIEW
OF
MOBILE
INTERNET
USERS
IN CHINA
China’s Mobile Market Sees
A Return To Normality
02
China's Mobile Internet User Base
(Q4 2019 – Q1 2021)
0.39% 0.39% 0.39%
0.30%
0.19%
-0.19%
2019 Q4 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1
Source: Analysys.cn QoQ Growth Rate
Mobile Internet User Distribution
Across City Tiers (Q1 2020 vs. Q1 2021)
12.4% 11.1%
Tier-1 Cities
24.8% 22.0%
New tier-1 cities
19.0% Tier-2 Cities
19.9%
Tier-3 Cities
21.0%
20.2% Tier-4 Cities
14.2% 16.6% Tier-5 Cities
8.5% 10.3%
2020 Q1 2021 Q1 Source: Analysys.cn
03
Average Time of Daily App Usage
per Mobile Internet User (Unit: Hour)
2020 Q1 6.7
2020 Q2 6.0
2020 Q3 5.4
2020 Q4 5.0
2021 Q1 5.3
Source: Aurora
04
INSIGHTS Mobile Internet User Base Growth Slows as Market Saturates By the end of the first quarter of 2021, the number of mobile Internet users in China reached 1.03 billion - an increase of 0.78% compared to the same period in 2020, but a decrease of 0.19% from the previous quarter. In recent years, although the growth rate of mobile Internet users has been slowing, it’s the first time negative growth has been seen, and indicates market saturation has been reached. 01 Overview of Mobile Internet Users in China China’s Mobile Market Sees A Return To Normality 05
Lower-Tier Emerging Markets Are Sparking Growth Opportunities Emerging markets have seen the largest increase in mobile Internet users. The total proportion of tier 3 to 5 users is about 48%, narrowing the gap with tier 1 and 2 cities. Mobile Internet users in tier-1 and 2 cities declined in the first quarter of 2021, while the proportion of users in tier-3 to 5 cities has increased significantly. Users from emerging markets are characterised by their high price sensitivity, more leisure time, a strong social circle and willingness to try out new products. Tier 3 to 5 cities represent huge marketing potential for mobile developers and brands. As Chinese Users Returned to Normality, So Did Their Mobile Habits The average time of daily app usage per mobile user was 5.3 hours in the first quarter of 2021, compared against 6.7 hours during Q1 2020. This was likely due to events including New Year's Day and Spring Festival holidays during the first quarter. While usage time increased slightly compared with Q4 2020, the single-day penetration rate of mobile apps dropped significantly, generally returning to pre-pandemic levels. 01 Overview of Mobile Internet Users in China China’s Mobile Market Sees A Return To Normality 06
OVERVIEW OF CHINA’S MOBILE GAMES MARKET Sales Stay Strong Despite Shifting Social Challenges 01 Overview of Mobile Internet Users in China China’s Mobile Market Sees A Return To Normality 07
China’s Game User Base and
Growth Rate (Unit: million)
664.8 665.9 667.6 666.5
663.8
0.13% 0.15% 0.17% 0.25% -0.16%
Nov 2020 Dec 2020 Jan 2021 Feb 2021 Mar 2021
Source: The Game Working Committee User Base Growth Rate
Actual Sales Revenue and Growth
Rate of China’s Mobile Game Market
(Unit: million)
37.6%
588.3
553.7 541.5
508.5
493.0
8.6%
6.5%
3.1%
-11.0%
2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1
Source: The Game Working Committee Sales Revenue Growth Rate
02 Overview of China’s Mobile Games Market
Sales Stay Strong Despite Shifting Social Challenges 08INSIGHTS As The Market Matures, Regulation Increases According to data from the Game Working Committee of China Audio-video and Digital Publishing Association, the number of mobile gamers reached 666 million in March 2021 - a decrease of about 1 million from the previous month. Consistent with trends of the overall mobile Internet user base, the number of gamers also experienced negative growth for the first time. At the same time, tightening approvals on domestic games in the first half of 2021 also had an impact on the market. The number of games that received “Ban Hao” (approvals) from January to May 2021 was 506, compared with 521 over the same period last year. These downward trends indicate that competition amongst game developers is becoming increasingly fierce. 02 Overview of China’s Mobile Games Market Sales Stay Strong Despite Shifting Social Challenges 09
Despite People Returning Back to Office, The “Stay-At-Home” Economy is Here to Stay In the first quarter of 2021, the sales revenue of the mobile game market reached RMB 58.83 billion. Although the number of game users has declined and the publication approval process has become stricter, the actual sales revenue of the mobile game market has maintained steady growth. With the gradual loss of ‘stay-at-home’ Pandemic traffic, there was still an increase of 6.25% compared against Q1 2020, which reflected the vitality of the domestic mobile game market. During Q1 2021, there were more marketing activities during the New Year's Day and Spring Festival, users were more active, and revenue grew. 02 Overview of China’s Mobile Games Market Sales Stay Strong Despite Shifting Social Challenges 10
CHINA MOBILE GAMES MARKET USER ACQUISITION TRENDS REPORT Creative Advertising Combats The Fall In UA 01 Overview of Mobile Internet Users in China China’s Mobile Market Sees A Return To Normality 11
Overview
Trend of the number of games
running UA campaigns (H1 2020 vs. H1 2021)
9000
4500
0
Jan Feb Mar Apr May Jun
H1 2020 H1 2021
Comparison of the total number of products
launched in the mobile game UA market
(H1 2020 vs. H1 2021)
First half of 2020
First half of 2021
0
4000 8000 12000 16000
Souce: Reyun Data CAS (The domestic version)
03 China Mobile Games Market User Acquisition Trends Report
Creative Advertising Combats The Fall In UA 12INSIGHTS
Approximately 6,700 new products appeared on the UA market
in H1 2021, representing a growth rate of nearly 45% (about
13% lower than the same period last year).
Big tech companies, such as Tencent’s & Netease’s gaming
arms tend to launch new games at the beginning of the year,
most of which were developed during the previous year. This
resulted in a boom in Q1 2021 on the UA market.
13Rate of new games on the UA market
21% 20%
15% 18% 15%
14%
January February March April May June
Comparison of growth rate of new games
running UA campaigns (H1 2020 vs. H1 2021)
First half of 2020 57.7%
First half of 2021 44.5%
0% 20% 40% 60%
Souce: Reyun Data CAS (The domestic version)
14Activation rate (Unit: 10,000)
9000 1.00%
8000
7000
6000
5000 0.50%
4000
3000
2000
1000
0 0.00%
Jan Feb Mar Apr May Jun
Source: Reyun Data TrackingIO Activated Devices Activation Rate
15The Impact of iOS 14.5
Percentage of devices with iOS 14.5
32.1% that have opted out of IDFA
iOS 14.5 and above adoption rate 30.3%
Source: Reyun Data TrackingIO
Monthly distribution of paying devices across
Android & iOS
20% 21% 13% 16% 16% 19%
80% 79% 87% 84% 84% 81%
January February March April May June
Source: Reyun Data TrackingIO Android iOS
16INSIGHTS
Activation dropped as life return back to normal. Users getting
used to typical UA campaign creatives might be another reason.
The launch of iOS 14.5 in Q2 2021 had an impact on UA
performances. Data from Reyun Data’s TrackingIO shows that
among the data tracked, 30.3% of all devices had been updated
to iOS 14.5; among which 32.1% limited IDFA tracking.
In general, amongst all pay devices, the distribution of Android
vs. iOS is 8:2. The importance of Android in China cannot
be overstated.
03 China Mobile Games Market User Acquisition Trends Report
Creative Advertising Combats The Fall In UA 17Genre-Specific Trends
Ad spending distribution by genre (H1 2021)
RPG 35.7%
Casual Puzzles 19.3%
Simulation 9.9%
Online Earning 8.3%
SLG 6.1%
Card 5.3%
Shooters 3.4%
Idle 2.9%
Action 1.8%
Tower Defense 1.7%
MMO 1.2%
Racing 1.1%
Board 1.0%
0% 10% 20% 30% 40%
Source: Reyun CAS
18Monthly new mobile game releases by genre
(H1 2021)
RPG
Casual Puzzles
Online Earning
Simulation
Card
SLG
Idle
Shooters
Tower Defense
Action
Racing
Board
MMO
Rhythm
Sports
Jan Feb Mar Apr May Jun
Source: Domestic version of Reyun CAS Top 1 by monthly advertised products
Top 2 by monthly advertised products
19Ad spending trends
Top 3 65%
The top 3 genres combined
In the first half of 2021, RPG, Casual
accounted for 65% of the industry's
Puzzles, and Simulation games
total ad spend, down by nearly 10%
remained the top 3 mobile game
from last year. Ad spend became
genres in terms of ad spending —
more evenly distributed across
far ahead of other genres.
genres as some niche genres and
sub-genres spent more on ads.
SLG & Shooters Top 10
SLG and Shooters maintained their MMO dropped out of the top 10 —
places on the ad spending rankings. the fastest decline of all genres.
20Trends of Ad Creatives for Games
Top 30 daily creative sets for existing games
distributed across media types (H1 2021)
34.4% 21.1%
General News Short-Form Videos
18.9% 12.2%
Vertical News Browsers
11.1% 2.2%
Videos Tools
21Top 30 daily creative sets for new games
distributed across media types (H1 2021)
5.6%
Tools
22.5%
6.7%
General News
Videos
10.1% 22.5%
Vertical News
Readers
13.5% 19.1%
Browsers
Short-form Videos
Source: Domestic version of Reyun CAS
22Video’s Share of Total Ad Content ( 2020 & H1 2021)
80% 70% 75% 74%
62%
60% 54% 57%
40%
20%
0%
2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1 2021 Q2
Videos ads vs. Images
in Content Growth Rate ( 2020 & H1 2021)
93%
90% 90% 91% 90% 90%
89%
88% 88%
87%
86%
84%
2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1 2021 Q2
Source: Domestic version of Reyun CAS Videos Images
23INSIGHTS
News platforms and short-form video apps remain the favourites
of game advertisers, accounting for the majority of the top 30
creative sets. (Toutiao, Douyin are some of the samples of these
types of media.)
A new trend emerged this year: Among the nascent game advertising
media, vertical news platforms—along with general news platforms
—overtook short / ultra-short video apps to become the most used
types of game advertising media.
Reading platforms made it among the top media types for the first
time. Browsers remained largely unchanged in performance—
in terms of both ranking and market share.
Videos have been taking the lead, accounting for over 70% of all
mobile game ad content in the first two quarters of this year.
Both videos and images registered a nearly 90% content growth
rate. Currently, a major pain point is how to create video and image
content fast enough to keep up with fast-paced demand. Solving
this pain point has become an industry imperative.
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