THIS MATERIAL IS A MARKETING COMMUNICATION.
China Game & Entertainment Industry Review
With game license approvals gradually resumed since April, sentiment on the online game industry has finally improved. A smaller pool of games is expected to get approved under the new license approval regime, forcing gaming companies to focus on development of resources to fewer number of titles, mainly premium ones. For the first two batches approved so far, the Chinese government has prioritized small to medium-sized gaming studios over the large ones. Into 2H22/2023, the market is expecting several global IP title releases, including Diablo Immortal (China) and DnF Mobile.
Game License Approval Resumption Incrementally Positive
On 11 April, the National Press and Publication Administration (NPPA)'s approval of the monetization license (Banhao) for 45 domestic games marked an official close to the 8-month long game license issuance suspension, vs. the 9 months pause in 2018. The resumption is incrementally positive to the whole industry and could re-vitalize the overall gaming industry sentiment and continued investment/R&D into new games.
Regular game approvals are likely to normalize towards a monthly release schedule in the future, though the total number of approvals per batch may be fewer than the pre-suspension period of average 102 per batch during April 2019
As evidenced by the games approved so far, Chinese authorities have been prioritizing those from small to medium-sized gaming studios over the large ones like Tencent, NetEase, and Bilibili, due to the former’s higher reliance on a single game title which makes them more vulnerable to license approval halt. That said, we expect gradual approvals of titles developed by larger gaming companies in the future, driving improved revenue growth trend domestically.
Looking ahead, global IP titles like Diablo Immortal (mobile game jointly developed by Activision Blizzard and NetEase) and DnF Mobile (mobile version of the legend PC game Dungeon & Fighter) are expected to be approved in the second half of the year or early 2023, in our view.
Post-Covid Normalization a Global Concern
The global mobile game industry (ex. China) is in the midst of a transition due to tough comps created by the pandemic benefits for the majority of 2022. In fact, global mobile game grossing saw another yoy decline of 8% in May, according to SensorTower. As a result, we expect lower international game revenue growth for Chinese gaming companies from 2Q22.
Entertainment: Last Round of regulations Likely on Livestreaming
In May, Chinese authorities jointly issued a note regulating livestreaming tipping, which took effect on June 7. The new rules require livestreaming platforms to: 1) limit the number of cross-channel player knock-out (PK) battles to two per account during 8pm-10pm each day and prohibit “punishment” for
The set of regulations likely marks the end of this round of regulatory tightening (started in 2020) and should help lead to healthier development of the industry. Some platforms have added daily spending reminders (users can voluntarily activate the function), which should help to reduce impulse spending and address clauses stipulated in the Feb 2021 guidelines.
The limits on
Growing E-Commerce with Livestreaming during
Livestreaming, as an interactive and entertaining format, continues to attract major brands and merchants, who are now more inclined to conduct in-house brand livestreaming sessions rather than hiring
Short-Form Video: Continued Momentum
Short-form video remained the structural winner in 2021/2022, further expanding its user time spent market share to 27.7% by Feb. 2022 (according to QM, April 2022), with ByteDance in particular taking share from other internet giants.
The proliferation of feed products/features and the ramp-up in user traffic monetization at those platforms have added a large amount of incremental ad inventory to the industry, and thus have further intensified competition and led to higher pricing pressure for Tencent's social ad business.
Staying Ahead with Mirae Asset’s Latest Insights
Disclaimer & Information for Investors
No distribution, solicitation or advice: This document is provided for information and illustrative purposes and is intended for your use only. It is not a solicitation, offer or recommendation to buy or sell any security or other financial instrument. The information contained in this document has been provided as a general market commentary only and does not constitute any form of regulated financial advice, legal, tax or other regulated service.
The views and information discussed or referred in this document are as of the date of publication. Certain of the statements contained in this document are statements of future expectations and other forward-looking statements. Views, opinions and estimates may change without notice and are based on a number of assumptions which may or may not eventuate or prove to be accurate. Actual results, performance or events may differ materially from those in such statements. In addition, the opinions expressed may differ from those of other Mirae Asset Global Investments’ investment professionals.
Investment involves risk: Past performance is not indicative of future performance. It cannot be guaranteed that the performance of the Fund will generate a return and there may be circumstances where no return is generated or the amount invested is lost. It may not be suitable for persons unfamiliar with the underlying securities or who are unwilling or unable to bear the risk of loss and ownership of such investment. Before making any investment decision, investors should read the Prospectus for details and the risk factors. Investors should ensure they fully understand the risks associated with the Fund and should also consider their own investment objective and risk tolerance level. Investors are advised to seek independent professional advice before making any investment.
Sources: Information and opinions presented in this document have been obtained or derived from sources which in the opinion of Mirae Asset Global Investments (“MAGI”) are reliable, but we make no representation as to their accuracy or completeness. We accept no liability for a loss arising from the use of this document.
Products, services and information may not be available in your jurisdiction and may be offered by affiliates, subsidiaries and/or distributors of MAGI as stipulated by local laws and regulations. Please consult with your professional adviser for further information on the availability of products and services within your jurisdiction. This document is issued by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Securities and Futures Commission.
Information for EU investors pursuant to Regulation (EU) 2019/1156: This document is a marketing communication and is intended for Professional Investors only. A Prospectus is available for the Mirae Asset Global Discovery Fund (the “Company”) a société d'investissement à capital variable (SICAV) domiciled in Luxembourg structured as an umbrella with a number of sub-funds. Key Investor Information Documents (“KIIDs”) are available for each share class of each of the sub-funds of the Company.
The Company’s Prospectus and the KIIDs can be obtained from www.am.miraeasset.eu/fund-literature . The Prospectus is available in English, French, German, and Danish, while the KIIDs are available in one of the official languages of each of the EU Member States into which each sub-fund has been notified for marketing under the Directive 2009/65/EC (the “UCITS Directive”). Please refer to the Prospectus and the KIID before making any final investment decisions.
A summary of investor rights is available in English from www.am.miraeasset.eu/investor-rights-summary/.
The sub-funds of the Company are currently notified for marketing into a number of EU Member States under the UCITS Directive. FundRock Management Company can terminate such notifications for any share class and/or sub-fund of the Company at any time using the process contained in Article 93a of the UCITS Directive.
Hong Kong: It is intended is for Hong Kong investors. Before making any investment decision to invest in the Fund, Investors should read the Fund’s Prospectus and the information for Hong Kong investors (of applicable) of the Fund for details and the risk factors. The individual and Mirae Asset Global Investments (Hong Kong) Limited may hold the individual securities mentioned. This document is issued by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Securities and Futures Commission.
Singapore: It is not intended for general public distribution. The investment is designed for Institutional investors and/or Accredited Investors as defined under the Securities and Futures Act of Singapore. This document is issued by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Monetary Authority of Singapore. Please consult with your professional adviser for further information on the availability of products and services within your jurisdiction.
Australia: The information contained in this document is provided by Mirae Asset Global Investments (HK) Limited (“MAGIHK”), which is exempted from the requirement to hold an Australian financial services license under the Corporations Act 2001 (Cth) (Corporations Act) pursuant to ASIC Class Order 03/1103 (Class Order) in respect of the financial services it provides to wholesale clients (as defined in the Corporations Act) in Australia. MAGIHK is regulated by the Securities and Futures Commission of Hong Kong under Hong Kong laws, which differ from Australian laws. Pursuant to the Class Order, this document and any information regarding MAGIHK and its products is strictly provided to and intended for Australian wholesale clients only. The contents of this document is prepared by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Australian Investments & Securities Commission.
Swiss investors: This document is intended for Professional Investors only. This is an advertising document. The Swiss Representative is 1741 Fund Solutions AG, Burggraben 16, CH-9000 St. Gallen. The Swiss Paying Agent is Tellco AG, Bahnhofstrasse 4, CH-6431 Schwyz. The Prospectus and the Supplements of the Funds, the KIIDs, the Memorandum and Articles of Association as well as the annual and interim reports of the Company are available free of charge from the Swiss Representative.
UK investors: This document is intended for Professional Investors only. The Company is a Luxembourg registered UCITS, recognised in the UK under section 264 of the Financial Services and Markets Act 2000. Compensation from the UK Financial Services Compensation Scheme will not be available in respect of the Fund. The taxation position affecting UK investors is outlined in the Prospectus. This document has been approved for issue in the United Kingdom by Mirae Asset Global Investments (UK) Ltd, a company incorporated in England & Wales with registered number 06044802, and having its registered office at 4th Floor, 4-6 Royal Exchange Buildings, London EC3V 3NL, United Kingdom. Mirae Asset Global Investments (UK) Ltd. is authorised and regulated by the Financial Conduct Authority with firm reference number 467535.
Copyright 2023. All rights reserved. No part of this document may be reproduced in any form, or referred to in any other publication, without express written permission of Mirae Asset Global Investments (Hong Kong) Limited.