“The journey is more important than the destination.”
By Guo Xixian
A Chinese New Year teaser of Black Myth: Wukong released on January 16 solidified the new action-adventure game in many eyes as China’s first hope for a true AAA game. The game is scheduled for a summer 2024 release. With over a year to go, expectations for the game are already big. Since the game’s first “UE5 Gameplay Test Trailer” was released in August 2020, progress of the game’s development has attracted a lot of attention.
Although it has grown into a leader in the global gaming market, China has not released a high-standard AAA game recognized widely internationally. This painful void has been a sore point for millions of gamers for years.
Drawbacks Behind Prosperity
AAA can mean a lot of things, but to gamers, they are the top-shelf titles. The term originated in the United States in the 1990s and still lacks an authoritative definition. A general interpretation of AAA goes: It takes a lot of money, a lot of time, and a lot of resources to develop such games.
In general, production of a AAA game costs hundreds of millions of dollars and efforts from hundreds or even thousands of people across three to five years. For example, Red Dead Redemption 2, a popular title, was produced with an investment of US$800 million and involved more than 2,000 people and eight years. Grand Theft Auto 5 was produced with a budget of US$265 million. The Witcher 3, with a budget of US$81 million, was produced by a team of about 1,500 people.
Wang Zhaojun, vice president of the China Electronics Metaverse Technology (Luzhou) Company, said that the games produced with this kind of investment are usually super-high in quality and super-large in volume, with fairly high requirements for hardware including processor, graphics card, and storage. Today, it’s difficult for mobile devices to support AAA images such as high-quality special effects, multi-agent modeling, and multi-touch, which require very high computing power. Therefore, most current AAA games can only run on desktop PCs and consoles.
According to the 2021 Global Games Market Report jointly released by Google and App Annie, China ranked first in the global gaming market with a share of 23.4 percent due to the rapid development of mobile games. Data analysis agency Newzoo indicated that of the 3 billion game players around the world, 2.8 billion are mobile players, 1.4 billion are PC players, and 900 million are console players (some are amphibious). In 2022, revenues of the global gaming market reached US$184.4 billion including US$92.2 billion by mobile games, half of the total.
Chinese developers such as Tencent, Netease, and Mihoyo have leveraged the vast domestic gaming market and sharpened their edges with mobile game research and development. They have risen rapidly in competition with the U.S., Europe, Japan, and South Korea to be important players in the global gaming industry.
After the booming development of China’s gaming industry, Chinese mobile games are popular around the world. However, Chinese console games are not yet available in the global high-end gaming market. The most popular AAA games such as The Witcher 3, The Legend of Zelda, Red Dead Redemption 2, and Grand Theft Auto 5 were developed by producers in the U.S., Europe, Japan, and South Korea. Sony, Microsoft, Blizzard, Ubisoft, Nintendo, Rockstar, and other well-known companies have gained lofty reputations with consistently sought-after releases and long-term profits.
Wang Zhaojun believes that a country’s gaming industry reflects the development of its information technology, art, music, film, television, and other industries. The absence of high-quality AAA games has left domestic console and PC gamers with a sense of otherness.
Market Choice
In 2000, the Chinese government issued a guideline on the management of video game businesses. Companies and individuals were prohibited from the manufacture or sale of game consoles and related accessories. On January 6, 2014, the Shanghai Pilot Free Trade Zone issued a notice which officially lifted the prohibition on the manufacture or sale of game consoles and accessories by foreign-invested enterprises. Consoles and accessories that passed content review by relevant authorities were allowed to be sold in the domestic market. Microsoft, Sony, Nintendo and other companies began to enter the Chinese market, and domestic gaming enterprises began to grow, reviving the stagnant Chinese gaming market.
However, over the last 13 years, the parallel market has been rampant. Domestic game developers have no advantage in the PC and console market with a lack of mature game technology and production teams. Compared to AAA games which require considerable investment and time and are subject to an uncertain market response, mobile games have a clear advantage with low development cost and short development cycle. To survive, many game developers opted to invest in the mobile game market.
Mumu, marketing manager at a domestic gaming company, said that AAA games are more profitable in the long term considering how they boost brand value and attract larger user groups. But AAA games are riskier with greater uncertainty as to whether they will be recognized by users and investors and approved by authorities. Mobile games have advantages of shorter development time and more accessible user groups. “Following the path that has been blazed by others is not necessarily profitable,” said Mumu, “but at least you will not lose money.” Return on investment exerts a direct impact on the direction of investment and production by game developers.
Wang Zhaojun recognized a fairly big gap between China and the developed countries in terms of game technology and content. Chinese consumers have not yet developed the habit of paying for good game content, high-end hardware requirements make games less accessible, and market demand affects the development direction of the industry.
Gamer Wangwang stays busy enough with work that she doesn’t have much time for entertainment. She plays mobile games to relax in her spare time, like millions of others. Development of the gaming industry has provided domestic consumers greater access to more high-quality games, improving their appreciation level. The emergence of high-quality games in the international market has forced domestic developers to continuously improve the quality of their games and change their development strategies.
In recent years, large domestic game developers have spontaneously opened independent studios. They have invested in or established overseas AAA game studios to recruit overseas talent. For example, Tencent invested in the studio of From Software (Japan), which produced Elden Ring and other games. It also invested in Exit Plan Games (Poland), which was established by developers of AAA games such as The Witcher 3 and Cyberpunk 2077. In September 2022, Ubisoft declared that Tencent was holding 9 percent of its shares. Tencent also holds a 5 percent stake in Black Myth: Wukong. Netease invested in the Liquid Swords studio, which was established by Christofer Sundberg, co-founder of the former Avalanche Studios (Sweden). It also invested in the studio of Quantic Dream (France), which produced Heavy Rain, Detroit: Become Human and other games. Industry insiders believe that video games tend to mirror different times and social contexts. After such “savage growth,” China’s gaming industry is catching up and exploring a path with its own characteristics.
Wang Zhaojun believes that game developers must balance short-term gains and long-term development. They face the test of harsh reality in decision-making. Blazing a path to more suitable development of the Chinese gaming market will take some time.
Quality is Key
In August 2020, Game Science, a Chinese video game developer, released a 13-minute “UE5 Gameplay Test Trailer” for Black Myth: Wukong, which attracted global attention as well as heated discussion. The trailer racked up nearly 2 million views on YouTube in just one day. On Bilibili, a Chinese video website, it jumped to the top of the list in two hours and received more than 13 million views in a day.
It’s hard to believe that a team of 30 inexperienced programmers would be able to produce an internationally competitive AAA game. However, gamers have reason to expect a lot considering the amazing quality of the trailer. “At long last, China is going to have AAA games of its own,” exclaimed a game player with a sigh of relief.
Monkey King, a popular figure from Journey to the West, one of the Four Great Classics of China, is a hero in the hearts of many. In the new game, the dark black Money King aroused the feelings and dreams of Chinese people to save the world. “I was an assassin in Egypt, a demon hunter in a different world, a dragon hunter, a knight, and everything,” commented one Bilibili user. “Now I finally see a glimmer of hope that I can return to a different world in my own country to be the Monkey King.”
Another domestic game that recently attracted attention was Genshin Impact developed by Mihoyo. Early development cost of the game reached US$100 million, with more poured in subsequently. The research and development team grew from 400 to over 1,000. From the perspective of investment, many consider it a AAA game in a broad sense. However, many think that the final presentation of the game still falls short of international standards.
The game broke through traditional thinking that AAA games could only run on PCs or consoles. It sought to streamline a console game by running it on multiple terminals and platforms. Meanwhile, it integrated traditional Chinese cultural elements including music and images, which has been very well received overseas. According to data released by Sensor Tower in January, since the release of Genshin Impact in 2020, Mihoyo has received total revenue of US$4.1 billion worldwide, third most of any title during the period, with the overseas market accounting for nearly two thirds of all its earnings. Whether it’s a AAA game or not, the game’s economic and cultural value is beyond debate.
Wang Zhaojun called games an important factor in promoting the progress of information technology and an important way to spread traditional Chinese culture overseas. He also emphasized that while promoting the rapid development of the gaming industry, seeking quick success and instant benefits need to be deterred.
According to data from Qichacha, an online database of Chinese companies and organizations, China is currently home to 420,000 game-related enterprises. In 2022, 106,000 new game-related companies were registered, up 6.8 percent year on year. However, the 2022 China Gaming Industry Report released by the China Audio-Video and Digital Publishing Association showed that the actual sales revenue of China’s gaming industry was about 265.8 billion yuan (US$39 billion) in 2022, down 10.33 percent year on year. Gamers complained on social media that the increasing number of games has made homogeneity a common phenomenon, with the frequency of hits waning. Many industry insiders believe that in the current circumstances, quality is key to success in the gaming market.
Mumu thinks that the quality of a AAA game is the paramount reason it is popular or not. Exquisite and realistic visuals, various playing modes, immersive experiences, strong storylines, and thought-provoking ideas can help gamers better recognize the intentions of developers.
Wang Zhaojun thinks that communication channels are undoubtedly important, but content is even more important. “It doesn’t matter how many ‘A’s a game has,” he said. “A good game will definitely be popular. Chinese game developers should combine their mature channel development experience with pursuit of high-quality content to develop good games.” “The journey is more important than the destination,” reads a Game Science inspirational poster. However AAA games develop in the future, Chinese developers have already set off on the journey in earnest.
China Report ASEAN 