The latest China Gaming Industry Report for January-June 2026, released by the Game Publishing Committee of the China Audio-video and Digital Publishing Association, shows that the domestic gaming market generated actual sales revenue of RMB 188.45 billion in the first half of the year, a year-on-year increase of 12.17%, setting a new record. Game user numbers reached 684 million, up 0.82% year-on-year, also hitting a historic high.
Among this, revenue from self-developed games in the domestic market reached RMB 163.356 billion, up 16.31% year-on-year, showing solid growth momentum, mainly driven by a stable mobile gaming foundation, simultaneous contribution from PC clients, and incremental expansion from cross-platform interoperability. Overseas sales revenue from self-developed games hit USD 12.372 billion, a year-on-year surge of 30.22%, primarily supported by continued operation of long-running titles and steady contributions from new releases.
In the first half of 2026, A-share gaming sector performance diverged dramatically, with the Matthew effect intensifying significantly and deepening competition in the existing market. User growth has entered a plateau phase, with domestic gaming user numbers remaining stable and limited room for incremental gains. Industry competition has shifted from "acquiring new users" to enhancing user LTV (lifetime value). Game license approval supply has remained normalized, with major developers maintaining ample pipeline reserves, while smaller firms face mounting pressure from R&D costs and user acquisition expenses, making successful new product launches increasingly challenging.
Within the top tier (revenue ≥ RMB 5 billion), internal trajectories have become clearly split. Zhejiang Century Huatong Group saw both revenue and profit surge simultaneously, while 37 Interactive Entertainment Network Technology Group Co.,Ltd. (RMB 7.275 billion revenue, down 14.28% year-on-year) experienced revenue contraction but retained earnings resilience, with net profit attributable to shareholders reaching RMB 1.766 billion, up 26.14% year-on-year. During the reporting period, revenue from long-running titles like Xun Dao Da Qian naturally declined, while multiple games launched in Q4 2025 and the current year, including Survive 33 Days, RO: A New Journey, and Last Asylum: Plague, remain in their introduction phase with unstable revenue contributions.
Mid-sized enterprises (revenue between RMB 1.5 billion and RMB 5 billion) showed diverging profitability logic. Kaiying Network, Giant Network, G-bits Network Technology, and Baotong Technology all saw steady revenue and profit growth. Perfect World Co.,Ltd. (revenue RMB 2.751 billion, down 25.47% year-on-year; net loss attributable to shareholders of RMB -118 million, down 123.54% year-on-year) turned to a loss due to new product investment. Ultrapower Software (formerly Shenzhou Taiyue) recorded "revenue growth without profit growth," with revenue up 20.45% to RMB 3.234 billion but net profit attributable to shareholders down 25.03% to RMB 382 million, as AI application and cloud services revenue surged 166% to RMB 1.421 billion but external procurement costs grew even faster, compressing gross margin by 5.85 percentage points to 7.28%.
Smaller companies (revenue below RMB 1.5 billion) showed the most extreme polarization. Youzu Interactive and Fuchun Co., Ltd. both saw net profit attributable to shareholders surge over 400%, achieving a turnaround from losses. In contrast, Shenzhen Bingchuan Network Co.,Ltd. (revenue RMB 1.19 billion, down 5.29% year-on-year; net loss attributable to shareholders of RMB -22.68 million), Mingchen Health (revenue RMB 896 million, up 25.90% year-on-year; net loss attributable to shareholders of RMB -5.07 million, down 112.34%), and Dianhun Network all swung to losses, with some firms even posting revenue growth while profits plummeted sharply.
Shenzhen Bingchuan Network Co.,Ltd. faced a double blow: the company continued large-scale market spending on its new SLG title X-Clash, with sales expenses up 48.37% year-on-year, while mature games such as X-hero, Super World, and HeroClash saw natural revenue declines as their operating cycles extended. Similarly, Mingchen Health launched multiple new games during the period, with distribution costs rising significantly and sales expenses reaching RMB 436 million, up 63.24% year-on-year, accounting for 48.71% of revenue, an 11-percentage-point increase year-on-year.
Divergent fortunes also emerged among top-tier leaders. Zhejiang Century Huatong Group achieved revenue of RMB 22.117 billion, up 28.53% year-on-year, with net profit attributable to shareholders of RMB 4.503 billion, up 69.51%, and non-GAAP net profit of RMB 4.303 billion, up 66.40%. Its titles Whiteout Survival, Kingshot, Tasty Travels: Merge Game, Endless Winter, and Benben Kingdom secured the runner-up position on Sensor Tower's global mobile game publisher revenue rankings for June 2026.
For mid-tier players, product cycles determined earnings resilience. Kaiying Network launched two key new titles, Chinese Paladin: A New Beginning and Three Kingdoms: Hearts United, with strong commercialization driving substantial revenue growth. Giant Network continued refined operations of existing products like Zheng Tu series and Ball Battle, while its major new title Supernatural Action Unit debuted in the first half and quickly monetized, driving synchronized revenue and profit explosions. G-bits Network Technology maintained steady long-term operations of its core Wendao series, reinforced its user base through content updates, and generated incremental gains from multiple new self-developed titles.
Perfect World Co.,Ltd.'s existing products, including the Perfect World mobile game and Zhu Xian series, have entered the mid-to-late stages of their lifecycles with revenues naturally declining. Its key new title Yi Huan launched during the period, with upfront marketing expenses concentrated and dragging down current performance, resulting in a swing to losses.
Smaller companies displayed stark contrast in new product pipeline execution. Xinghui Entertainment (RMB 517 million revenue, down 54.43% year-on-year due to the October 2025 divestiture of its football club business, which had contributed RMB 502 million in revenue in the prior-year period) saw its gaming business revenue decline 22.67% to RMB 314 million, with gross margin falling 6.03 percentage points to 70.82%. Core long-running titles Three Kingdoms Heroes: Overlord and Overlord Ambitions entered lifecycle maturity with naturally declining revenue, while new products Land of War and Ragnarok Online: Dawn are still ramping up, with incremental revenue insufficient to offset declines from older titles, creating a product revenue gap. Overall, within the existing market, industry resources continue to concentrate toward companies with long-running products, mature pipelines, and refined operational capabilities, while single-product dependence, misallocated R&D investment, legacy asset burdens, and intense overseas competition remain core factors dragging down performance for many enterprises.
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