(Yicai) Sept. 3 -- China’s video gaming revenue expanded by more than 12 percent to CNY188.5 billion (USD28.1 billion) in the first half, with growth increasingly concentrated on leading developers Tencent Games and NetEase along with a small number of blockbuster and evergreen titles, according to an industry report.

Growth in the number of video game players slowed to 0.8 percent in the six months ended June 30 from a year earlier, reaching 684 million in a highly saturated market, the report released by the game publishing committee of the China Audio-Video and Digital Publishing Association also showed.

By comparison, the market generated revenue of CNY351 billion for the whole of last year, a 7.7 percent year-on year gain, while the user base reached 683 million, up 1.4 percent.

A clear "K-shaped" divergence is emerging at the corporate level, Jiang Xiaoxiao, managing director of China Insights Consultancy, told Yicai. The double-digit growth was mainly driven by leading game developers and a few hit products, while titles in the mid-to-long-tail segments broadly did not do well, he added.

Revenue at Tencent Games rose 10 percent to CNY130.1 billion in the period, accounting for about two-thirds of the industry’s total. Its income from the Chinese market climbed 11 percent to CNY92.7 billion (USD13.8 billion), and that from overseas increased 6 percent to CNY37.4 billion.

Six of the top 10 Chinese mobile games by revenue in July were developed by Shenzhen-based Tencent Games, including the four highest grossers, according to Gamma Data statistics.

NetEase’s gaming revenue expanded 8.3 percent to CY50.7 billion, ranking it second in China.

Zhejiang Century Huatong Group, the third largest firm by gaming revenue, had revenue growth of 28 percent, mainly thanks to blockbuster titles such as Whiteout Survival. Giant Interactive Group hit the jackpot with Tomb Busters, which generated over CNY5 billion (USD740 million) in sales since January 2025, doubling the company's earnings from a year earlier.

While top-tier games are growing in scale, the "traffic dividend" from WeChat and Douyin mini-games is being captured largely by a subset of smaller developers, putting mid-tier companies under much pressure, Liu added.

Meanwhile, major internet companies are exiting the sector. For instance, ByteDance sold Moonton Technology to Saudi Arabia's Savvy Games Group for over USD6 billion in May, and Alibaba Group Holding sold Lingxi Games to Trustar Capital last month, with market reports suggesting that deal was in excess of USD1.5 billion.

Both Moonton and Lingxi Games have well-known titles and have the ability to generate steady revenues, indicating they are not loss-making businesses worth divesting.

Editor: Futura Costaglione