After a long day's work, Lisa Gao, a programmer at a Beijing-based tech company, often immerses herself in the fantasy world of online gaming. Her favorite game is Genshin Impact, an open-world action role-playing game developed by Chinese game company miHoYo established in Shanghai in 2011.

In the game, which features a three-dimensional design that simulates real-world scenery, a virtual Gao climbs snowy mountains inspired by the Alps in Europe to take in a breathtaking sunset, or visits a traditional Chinese city where thousands of lanterns light up the night sky.

"I have been playing the game for about two years and have spent more than 10,000 yuan ($1,400) on swiftly completing my character's missions. I feel like an adventurer exploring the virtual world," Gao told Beijing Review.

From a niche industry to a booming sector, online gaming is increasingly embraced by Chinese gamers, even driving the development of many professional esports teams. In previous years, foreign online games such as Defense of the Ancients, League of Legends and those developed by Japanese gaming company Nintendo dominated the market.

With the recent boom of domestic game developers, Chinese-made games are becoming increasingly popular both at home and abroad.

In 2023, China's game market raked in around 303 billion yuan ($42.7 billion) with a year-on-year growth of 14 percent. It now has 668 million online players, a new record high, according to an annual report released during the 2023 China Game Industry Annual Conference, which took place in Guangzhou, Guangdong Province, from December 13 to 15.

The Chinese authorities have been providing support and enhancing regulation for the gaming industry in recent years. In December 2023, the National Press and Publication Administration (NPPA) announced the approval of licenses for 40 overseas online games and 105 new Chinese games. This was the first time the number of approved homegrown games exceeded 100.

"The gaming industry is driving new technologies like artificial intelligence (AI). In the years to come, it will possibly become one of the new pillar industries in China," Pan Helin, a researcher with the International Business School of Zhejiang University, told Beijing Review.

Fiction to fad

Today, online games are accessible on mobile phones, personal computers and other gaming gadgets, allowing developers to mushroom in the market. As virtual reality technologies further improve a full-fledged immersive user experience, the gaming industry is on a new path of development.

Chinese tech companies such as Tencent, with its hit game King of Glory, and NetEase, which had partnered with U.S. game company Blizzard Entertainment, have been major players in the field. Domestic game companies such as miHoYo and Lilith are also en route to becoming household names.

The growing demand for entertainment has spurred the development of homegrown games. Many young Chinese will joke that they have a double standard when it comes to consumption—paying for online games is a split-second decision, but they definitely hesitate to pay a similar amount for food or clothes.

While competitive games with intense battle scenes do still appeal to domestic players, more and more people are seeking a sense of relaxation in their games.

Also, the number of female players has continuously been on the up, and an increasing number of games now cater to their preferences. Think those in which the players can complete their missions without fighting other players, or dress up for the roles they play, or go on dates with virtual characters.

Traditional Chinese culture, too, is becoming a popular element in homegrown games.

In 2020, a simulation game called Jiangnanbaijingtu, or Scenery of the Water Towns in the South of the Yangtze River, became a blockbuster.

Set in the Ming Dynasty (1368-1644), upon entering the game, players may feel as if they are traveling back in time as they flip through ancient Chinese painting scrolls.

Less than a month after its launch in July 2020, the game, developed by Chinese game company Coconut Island, became the top free game in China on the Apple App Store list.

In the game, the characters are mostly named after famous figures from the pages of Chinese history, and the scenes have real-world prototypes. Players can design and build cities where they guide virtual characters to grow crops and run businesses to make their hometowns prosper. The game doesn't come with exciting battles, but many fans adore the "pastoral lifestyle" it offers.

"I've been playing the game for three years and have learned a lot about Chinese history and ancient Chinese architectural styles and customs. Its distinctive traditional painting style makes me a loyal fan," a user surnamed Ye noted on Xiaohongshu, a hugely popular Chinese lifestyle and e-commerce app.

Founded in 2004, Perfect World, a movie and game company based in Beijing, is now a major game developer in China. Many of its games, such as New Swordsman and Jade Dynasty: New Fantasy, are in the style of wuxia, a literary genre that creates a fantasy world in ancient China and features martial arts masters.

Tower of Fantasy, a game produced by the company in 2021, drew inspiration from Su embroidery, a traditional folk art from the area around Suzhou, Jiangsu Province, for the design of the characters' clothing. The background music of its games has also incorporated traditional local folk songs.

As Xiao Hong, CEO of Perfect World, told the conference in late December, online games are more than ways of entertainment today, "they are cultural products that know no barriers across the globe."

"Traditional culture and games breathe new life into one another. Domestic players have a strong sense of identity when playing games featuring Chinese styles. By introducing [our] homegrown games overseas, more international players will also have the chance to learn about Chinese culture," Xiao said.

Gamers, unite!

And Chinese games are indeed increasingly embraced by overseas players.

In Genshin Impact, the world is divided into several regions that simulate the architectural styles of China, Japan, the Middle East and Europe. Overseas players will find scenes in the game familiar and feel connected.

The game in 2022 introduced a new character, Yun Jin, a Chinese opera singer, whose voice was dubbed by a bonafide Peking Opera professional.

Many overseas players deemed the distinctive opera performances highly appealing. The clip of Yun Jin's aria alone attracted a whopping 1.7 million views in just five days on YouTube.

Perfect World started exploring the global market in 2008. The company now has more than 20 branches worldwide, with its games and movies reaching over 100 countries and regions.

"Perfect World has been localizing its games when going global and turning to new technologies to improve the user experience," Yi Di, Vice President of Perfect World, told Beijing Review.

As Yi introduced, Tower of Fantasy has attracted players from many countries, with about 40 percent coming from Japan.

In the first week after its overseas release in August 2022, it topped the list of free games in nearly 40 countries.

According to the annual report released at the conference, China's self-developed game products generated about $16.4 billion in overseas revenue in 2023, down 5.65 percent year on year, the second year of decline since 2022.

The United States and Japan remain the top two overseas markets for Chinese mobile games, accounting for 32.5 percent and 18.9 percent of the market share, respectively, followed by the Republic of Korea.

Tang Jiajun, Deputy Secretary General of the China Audio-Video and Digital Publishing Association, said at the conference that the declining overseas revenue indicates increasing competition in the global gaming market.

"New tech developments like AI-generated content, the metaverse and 5G will boost the gaming industry's innovation drive and bring more opportunities to Chinese game developers when exploring overseas market," Tang said.

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