On July 25, CaiLian News (Reporter Fang Yanbo) China Digital Entertainment Expo & Conference (CDEC) officially opened in Shanghai as the heavyweight opening of ChinaJoy. The China Audio-Video and Digital Publishing Association released the report on the Chinese gaming industry for the first half of 2024 at the meeting. In the first half of this year, the actual sales revenue and user scale of the domestic gaming market both doubled, and mini-game has continued to grow for three consecutive years.

At the event site, executives from many gaming companies, such as Tencent (00700.HK), Zhejiang Century Huatong Group (002602.SZ), and Netease (09999.HK), had conversations on how to reshape positioning, seize opportunities, and break through growth bottlenecks in the age of artificial intelligence. They unanimously believed that AI technology could bring improvement and efficiency and become a way for the gaming industry to get rid of traditional growth constraints and development paths. Some industry insiders said that the impossible triangle of cost, quality, and efficiency, which has been difficult to reconcile for a long time, is being broken by AI.

Gaming users hit a new high again.

Since the beginning of this year, China's gaming market has continued to grow steadily. According to the report on the Chinese gaming industry for the first half of 2024, the actual sales revenue of the domestic gaming market from January to June this year was 147.267 billion yuan, a year-on-year increase of 2.08%; the user scale was nearly 674 million, a year-on-year increase of 0.88%, reaching a new high.

Among all the segmented markets, the actual sales revenue of mobile gaming market was 107.577 billion yuan, a year-on-year increase of 0.76%, accounting for 73.01% of the overall market and still dominated the market; the actual sales revenue of client gaming market was 33.763 billion yuan, a year-on-year increase of 2.49%, and the market share was 22.93%; the actual sales revenue of web gaming market shrank to 2.34 billion yuan, a year-on-year decrease of 1.88%.

In the overseas market, due to the significant growth brought by popular products, the actual sales revenue of independently developed games in China's overseas market reached 8.554 billion US dollars in the first half of this year, a year-on-year increase of 4.24%. Among them, the United States, Japan, and South Korea are still the main overseas markets, accounting for 33%, 15.66%, and 8.82% respectively. The market share of Australia, Italy and Canada entered the top ten.

Among the top 100 independently developed mobile games in terms of revenue in the overseas market, the proportion of strategy games is still the highest, accounting for 32.66%, while the proportion of role-playing games dropped to 10.48%. The revenue of simulation management, MOBA, and placement games has increased significantly. The proportion of the three types of products has increased from 5.28%, 3.83%, and 3.95% last year to 9.97%, 9.07%, and 7.5% this year.

It's worth noting that mini-games that have maintained high-speed growth for two consecutive years continue to advance vigorously. In the first half of this year, the actual sales revenue of mini-game mobile games was 16.603 billion yuan, a year-on-year increase of 60.5%. Among them, the actual sales revenue generated from in-app purchases was 9.098 billion yuan, a year-on-year increase of 81.56%, and the advertising revenue was 7.505 billion yuan, a year-on-year increase of 40.7%.

AI breaks the shackles of the gaming industry.

The gaming industry has always been a representative of chasing new technologies and models for self-innovation. In the current revolutionary breakthrough in cutting-edge digital technology such as artificial intelligence, how to fully stimulate AI potential and break through growth bottlenecks is also a focus of attention in the industry.

Zhang Wei, Vice President of Tencent, mentioned in his speech at the meeting that online games are undergoing a revolution driven by cutting-edge digital technologies, and artificial intelligence has become a "standard configuration" for game industry development.

"We launched a new self-developed AI engine this year, which has multiple AIGC capabilities such as 3D graphics, plot, and level design, which can improve the efficiency of some work related to game scene creation and content generation by more than 40 times. In addition, we have made significant progress in content production pipelines, game character training, and intelligent action generation. For example, in the Naruto mobile game, a large-scale reinforcement learning solution for fighting games directly reduced the time and resources needed for training by more than 90%." Zhang Wei said.

"According to recent industry surveys, 80% of respondents believe that AI technology promotes the overall improvement of projects and increases productivity by more than 20%" Zhang Wei further explained.

Xie Fei, President of Zhejiang Century Huatong Group, believes that self-innovation is the eternal theme of the game industry. "The IP of Legend, which is exclusively licensed in mainland China, has experienced the highest global online population and has also experienced lows plagued by infringement of private servers and cheat codes, but has never stopped innovating in content and operating models." Xie Fei said, "Now we also use AI technology to advance this IP towards the goal of building a UGC ecology, allowing shared creation of content and shared interests."

Due to the high degree of industrialization, interactivity, and real-time requirements of game production, a "impossible triangle" has arisen in the industry, that is, cost, quality, and efficiency are difficult to meet at the same time. However, in the view of Netease's vice president Pang Dazhi, this dilemma is expected to be broken by AI.

Pang Dazhi said that the improvement and efficiency brought by AI are expected to become a way for the game industry to break away from traditional growth constraints and development paths. "By open sourcing AI to players, players can better integrate into the entire game ecosystem, form a benign feedback while also expanding the UGC content sector."

Combining the practical experience of mobile games such as "Egg Party" and "Nishuihan", Pang Dazhi believes that this approach can achieve a transition from PGC dominance to PGC+UGC dual-line parallel, thereby mitigating the problem of content output.