Two shoppers try out VR games in a department store in Hohhot, Inner Mongolia Autonomous Region. Liu Wenhua/China News Service
According to a new report from Global consultancy PwC.
China will lead the world in average revenue growth in segments such as virtual reality, internet advertising, video gaming and esports, the report said.
“Most of China’s entertainment and media industry has recovered in 2021 and the growth rate is expected to return to pre-COVID levels in 2022 and 2023. In the near future, with the emergence of more content creators and short video platforms , we will expect internet advertising to grow faster and increase market share,” said Frank Cai, mainland China media leader at PwC.
Cai said the rise of the metaverse will continue to drive the adoption and development of innovative technologies, while digital collections will be widely accepted and used in the real and virtual world. The term metaverse refers to a shared virtual environment or digital space created by technologies such as virtual reality and augmented reality.
The report pointed out that China’s Internet advertising revenues will reach approximately $185.3 billion by 2026, at a compound annual growth rate of 13.1 percent, as new forms of advertising such as short video and live streaming have brought new growth streams to Internet advertising.
In particular, mobile Internet advertising spending is on track to dominate the growth of China’s Internet advertising industry, with the share of total Internet advertising revenue set to increase to 81 percent by 2026.
The revenue of China’s over-the-top (OTT) video market is expected to reach $16.2 billion by 2026, with a compound annual growth rate of 7.3 percent.
The Chinese film industry is recovering well as the number of moviegoers has recovered strongly. The country has become the world’s largest film market, accounting for 35.6 percent of global box office revenue, and is expected to return to pre-pandemic levels by 2023, the report said.
China and the United States remain the two largest film markets in the world, with China expected to account for 26 percent of global box office revenue by 2026, above 22 percent for the US.
PwC estimates that China’s total movie sales will reach $13.9 billion by 2026, with a compound annual growth rate of 8.62 percent in movie sales over the next five years. The country’s film production capacity is improving to meet the growing demand of the Chinese audience.
In addition, China is the world’s largest market for video games and esports, with revenue expected to grow at 11.3 percent per year from 2021 to $94.6 billion in 2026.
Meanwhile, Chinese games are increasingly trying to expand into overseas markets. In the coming years, China’s video game exports will continue to grow significantly, surpassing those of the US, Japan and South Korea, driven by the rapid growth of app-based games.
Cecilia Yau, PwC’s mainland and Hong Kong media leader, said the year 2022 is full of uncertainty as factors such as the COVID-19 pandemic and supply chain changes continue to impact consumer behavior and the development of entertainment. and media industry .
“The global landscape of the entertainment and media industry is being reshaped and consumption patterns could change dramatically, while the metaverse could spark a new wave of digitization,” Yau noted.
The report noted that technological and commercial innovations have incrementally contributed to a burgeoning metavers and associated industrial ecosystem. Digital collections, virtual people and virtual worlds have become the three main segments in the metaverse in China.
Tech heavyweights are leading the metaverse development in China as startups have also entered the market. To seize the strategic opportunities arising from the metaverse and emerging technology, companies will need to assess a range of considerations, such as business models, development strategies and tax planning, it added.
More efforts should be made to promote the healthy and orderly development of the metaverse and improve the related laws, regulations and industrial applications, said Shan Zhiguang, director of the Information and Industrial Development Department of the State Information Center, while giving the emphasizes the importance of complying with current laws.