Chinese Regulators Indicate a Ban on All Future AR+LBS Games

It appears that Pokemon will not Go in China. Reuters reports that SAPPRFT is concluding its review of a recommendation by a government body that states that Augmented Reality and Location Based Services (AR+LBS) games are dangerous for personal safety and national geo-security. If that is in fact the final ruling, Pokemon GO will not be permitted to launch in China, nor would the highly anticipated Monster Hunt GO. The fate of active mobile AR+LBS games, Demon Catcher and Pet Bang Bang, is unclear.

China’s Year of Virtual Reality

2016 became “year one” of virtual reality in China, due to the fact that the sector finally truly started to grow. We estimate that China’s VR hardware 2016 market size will have hit $300 million by the end of 2016 with mobile VR being the unequivocal leader in terms of hardware unit sales. Want to learn more? Read our article on Forbes posted during the end of year holidays.

Steam Sales in 2016

Based on data from SteamSpy, a site that uses Steam’s API to create speculative data on the platform and its games, 2016 was a pretty big year. The average Steam game available on the service had median sales of 6,640 copies with $25,245 in revenue. Overall, their guess is that the Steam market is around $3.5 billion – the same as last year.

According to Galyonkin, “The reason for this is fairly simple. While Steam indeed got way more new games compared to 2015, the amount of truly big titles released this time around was lower. The combination of GTA V, Fallout 4 and The Witcher 3 is hard to beat. Besides, Call of Duty: Infinite Warfare performed way worse than Black Ops III, and two other biggest shooters of the year (Overwatch and Battlefield 1) aren’t on Steam at all. This stagnation could also be attributed to slower growth for Steam in the US and Western Europe. While Steam is expanding its audience in China and other Asian countries, the purchasing power of gamers there cannot match that of gamers from richer countries.”

Chinese fantasy role playing game has 50m active players

Honor of Kings has attracted 50 million active daily users, after adding 5 million every month since it was launched by Tencent – making it more popular than Nintendo’s global sensation Pokémon Go. It’s essentially a mobile version of League of Legends, the worldwide MOBA hit by Riot Games (owned entirely by Tencent as of 2015) and worth keeping an eye on. Niko analyst Daniel Ahmad was interviewed for this Financial Times article.

The Past 800 Years of China’s Economy

To understand the Chinese market, you have to understand their history as an economic force throughout the millennia. China currently makes up about 17% of the global economy, the same size as the US. But at one point it was nearly 30% of the global economy. Check out this overview on Business Insider to see the trends over the past decades.

Niko Partners on Twitter

Follow us on Twitter @nikochina to see these comments in real time as we publish them! @ZhugeEx is Niko analyst Daniel Ahmad – his opinions are his own and he has a very informative blog and Twitter feed. You can also find us on WeChat (ID: NikoPartners). Here are a few of our tweets from last week:

  • Nice interview in the Financial Times by Niko’s Daniel Ahmad @zhugeEx last week
  • League of Legends Strikes Deal with MLB http://nikopartners.com/league-legends-strikes-deal-mlb/ …
  • China’s Newest Online Gaming Regulations – Explained http://nikopartners.com/chinas-newest-online-gaming-regulations-explained/ …
  • China’s newest digital games regulations explained by Niko analyst Daniel Ahmad @ZhugeEX
  • New MOC Rule for Virtual Currencies in China http://nikopartners.com/new-moc-rule-virtual-currencies-china/ …
  • Had a great time on a panel @VR_Intelligence VRX conf in SF today with my former IDC analyst colleague @ChristineA_IHS and @MikeGoodman_SA
  • China regulatory agency SAPPRFT approved more than 1,000 games in November, up from 400-500 in each of Aug Sept and Oct since new policy.