China’s video games market has reportedly returned to growth in 2023 as domestic revenue reached $42bn (298.68bn yuan) for the first time. The healthy financial report signals that the industry is recovering from an eight-month crackdown by the country two years ago. 

According to video gaming industry association CGIGC, the number of Chinese gamers grew to a record 668 million in 2023, alongside achieving record domestic revenue. 

The news comes after China’s video game industry reported a drop in revenue for the first time last year, resulting from China’s eight-month crackdown on gaming due to addiction concerns. 

China’s domestically developed games also witnessed growth, with revenue rising by 15% over the previous year to $35bn.

The return to form for China’s gaming industry aligns with its market leader Tencent‘s return to growth. The gaming giant posted an historic first-ever revenue loss in 2022.

Tencent’s healthy financial growth coincides with the reveal last week of its big-budget console game, Last Sentinel. The title marks the gaming giant’s largest attempt yet to break into the console and Western market. 

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Tencent is known mostly for developing popular mobile games, which are usually much cheaper and quicker to make. However, the company has been looking to expand overseas as well as switch up its game plan for a changing domestic market. 

Last Sentinel, the new title being developed by Tencent’s Lightspeed LA game studio, is the biggest shot by the company yet at making that change.