Game consoles were once banned in China. Now Chinese developers want a slice of the $49 billion pie
GUANGZHOU, China — For 14 years, gaming consoles from the likes of Sony, Microsoft and Nintendo were banned in China.
The ban was finally lifted in 2014.
While these consoles were available on the so-called “grey market” — places that would sell imported devices for a high price — the prohibition led to the surge in popularity of PC and mobile games.
Chinese developers, like giants Tencent and NetEase, poured their efforts into making hit titles for those platforms during the more than a decade-long ban.
Now things are changing. China’s tech giants, alongside a new breed of gaming developers, are looking to tap the growth of videogame consoles in China and target players overseas who have grown up with those devices.
For the global market, the console is huge — roughly like 30% revenue. But in China, it’s only 1% and so there’s a huge potential opportunity for the console game developer inside China.Daniel Ahmadsenior analyst, Niko Partners
Sony, Microsoft and Nintendo have all launched their next-generation gaming consoles in China.
“For the global market, the console is huge — roughly like 30% revenue. But in China, it’s only 1% and so there’s a huge potential opportunity for the console game developer inside China,” Frank Mingbo Li, the founder of Studio Surgical Scalpels, a Tencent-backed game studio, told CNBC.
Studio Surgical Scalpels is making an outer-space based “first-person shooter” game called “Boundary” for PC and Sony’s PlayStation 4 and PlayStation 5.
China’s games console hardware and software market hit $1.84 billion in 2020 and is expected to reach $2.46 billion in 2025, according to market intelligence firm Niko Partners. But that’s eclipsed by both mobile and PC game revenue. Mobile game revenue alone stood at $29.2 billion in 2020.
Globally, the console market is expected to rake in revenue of $49.2 billion, accounting for 28% of the worldwide games market, according to market research firm Newzoo.
That’s where the opportunity lies.
“Despite consoles being banned between 2000 and 2014, we are seeing high demand for consoles in China, and there is an even larger market for console outside the country,” Daniel Ahmad, senior analyst at Niko Partners, told CNBC.
Li, who is a gaming industry veteran, said “Boundary” was designed from the “very first day” for the global market, underscoring the Chinese developer’s ambitions.
“Boundary” is just one of several high-profile console games coming out of China. Another upcoming game is “Black Myth: Wu Kong” which is being developed by Chinese studio Game Science.
Gaming giants eye console market
The world’s largest gaming company, Tencent, along with rival Chinese firm NetEase, are also eyeing the console market.
NetEase launched a high-profile game on Thursday called “Naraka: Bladepoint” — a 60-person battle royale style game like popular title “Fortnite.” The Hangzhou, China-based company is also developing the game for consoles but hasn’t revealed a release date yet.
In 2019, NetEase opened a gaming outfit in Montreal, Canada, to help with international expansion and another studio in Japan dedicated to console game production last year.
In an interview with CNBC this month, Hu Zhipeng, vice president at NetEase, called the console market “pretty attractive.”
“Our Sakura Studio in Japan and in Montreal are dedicated to developing games on consoles, as one third of overseas market shares is taken by console games,” Hu said.
Tencent’s growth in gaming over the years has been driven a lot by acquisitions of or investments into game studios. That has been focused heavily on mobile but is now shifting to companies making games for PC and console.
“Nearly half of the 51 investments in 2021 are in companies with experience developing PC and console games. Many of these are domestic,” according to a Niko Partners report published in May.
Until 2020, most of Tencent’s domestic investments went into mobile gaming while PC and console investments were done overseas, the report noted.
And Tencent-owned developer TiMi Studio has opened offices in Montreal and Seattle to focus on PC and console games.
“Chinese studios are looking to match their overseas peers in game development by standardizing tools, creating advanced production processes, and investing in large teams to ensure they can create large scale AAA quality titles that provide a competitive edge, meet evolving player demands, and reach a broad audience both in terms of geographies and platforms,” Ahmad from Niko Partners said.
AAA is an unofficial term to denote high-quality and popular games.
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event on Wednesday, Sept. 25, 2024.
Bloomberg | Bloomberg | Getty Images
Meta shares hit a record high on Monday, underscoring investor interest in the company’s new AI superintelligence group.
The company’s shares reached $747.90 during midday trading, topping Meta’s previous stock market record in February when it began laying off the 5% of its workforce that it deemed “low performers.”
Meta joins Microsoft and Nvidia among tech megacaps that have reached new highs of late, all closing at records Monday. Apple, Amazon, Alphabet and Tesla remain below their all-time highs reached late last year or early this year.
Meta CEO Mark Zuckerberg has been on an AI hiring blitz amid fierce competition with rivals such as OpenAI and Google parent Alphabet. Earlier in June, Meta said it would hire Scale AI CEO Alexandr Wang and some of his colleagues as part of a $14.3 billion investment into the executive’s data labeling and annotation startup.
The social media company also hired Nat Friedman and his business partner, Daniel Gross, the chief of Safe Superintelligence, an AI startup with a valuation of $32 billion, CNBC reported on June 19. Meta’s attempts to buy Safe Superintelligence were rebuffed by the startup’s founder and AI expert Ilya Sutskever, the report noted.
Wang and Friedman are the leaders of Meta’s new Superintelligence Labs, tasked with overseeing the company’s artificial intelligence foundation models, projects and research, a person familiar with the matter told CNBC. The term superintelligence refers to technology that exceeds human capability.
Bloomberg News first reported about the new superintelligence unit.
Meta has also snatched AI researchers from OpenAI. Sam Altman, OpenAI’s CEO, said during a podcast that Meta was offering signing bonuses as high as $100 million.
Andrew Bosworth, Meta’s technology chief, spoke about the social media company’s AI hiring spree during a June 20 interview with CNBC’s “Closing Bell Overtime,” saying that the talent market is “really incredible and kind of unprecedented in my 20-year career as a technology executive.”
An electric air taxi by Joby Aviation flies near the Downtown Manhattan Heliport in Manhattan, New York City, U.S., November 12, 2023.
Roselle Chen | Reuters
Joby Aviation stock soared about 12% as the flying air taxi maker got closer to launching a service in the United Arab Emirates.
The electric vertical takeoff and landing, or eVTOL, company said Monday that it delivered its first aircraft to the UAE and has completed piloted flight tests as it readies for a 2026 launch in the region.
“Our flights and operational footprint in Dubai are a monumental step toward weaving air taxi services into the fabric of daily life worldwide,” said founder and CEO JoeBen Bevirt in a release. He called the Middle East nation a “launchpad for a global revolution in how we move.”
Joby’s planned launch in the UAE was announced in February 2024 as part of an agreement with Dubai’s Road and Transport Authority. The deal included exclusive rights to conduct air taxi service in Dubai for six years.
As part of the project, Joby said in November that it began building one vertiport at Dubai International Airport, with three additional locations slated for Palm Jumeirah and Dubai’s downtown and marina. Joby also announced an air taxi agreement with three Abu Dhabi government departments in 2024.
The California-based company has made other expansion moves in the Middle East. Shares jumped earlier this month after Saudi Arabian firm Abdul Latif Jameel announced a roughly $1 billion investment for up to 300 eVTOLs. The firm participated in Joby’s Series C funding round.
Joby shares have surged more than 32% this year, swelling its market capitalization to over $9 billion.
Demand for air taxis, which take off and land similar to helicopters, has gained momentum in recent years. The service faces regulatory and safety hurdles but has been lauded for its ability to cut traffic congestion and slash emissions.
Earlier this month, President Donald Trump signed an executive order that included a pilot program for testing electric air taxis.
Oracle CEO Safra Catz speaks at the FII PRIORITY Summit in Miami Beach, Florida, on Feb. 20, 2025.
Joe Raedle | Getty Images
Oracle shares jumped more than 5% after a recent filing showed a cloud deal that would add over $30 billion annually.
CEO Safra Catz is slated to share the deal news at a company meeting Monday, according to a filing with the Securities and Exchange Commission. The revenues are expected to start hitting in the 2028 fiscal year.
“Oracle is off to a strong start in FY26,” Catz is expected to say, according to the filing. “Our MultiCloud database revenue continues to grow at over 100%, and we signed multiple large cloud services agreements including one that is expected to contribute more than $30 billion in annual revenue starting in FY28.”
The deals revealed Monday by Catz will not affect the company’s 2026 guidance, according to the filing.
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