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Investing.com–Bernstein analysts hailed December 2024 as a turning point for Chinese video game developers, citing the global successes of Tencent Holdings (OTC:) Ltd’s (HK:) ‘Exile 2’ and NetEase Inc’s (HK:). ‘Marvel Rivals’
The games will mark a major step in China’s bid to capture a larger share of the $165 billion global gaming market beyond the $45 billion domestic sector, analysts said in a note.
Tencent’s ‘Path of Exile 2’ has emerged as a good rival to Blizzard’s ‘Diablo II’, with a polished game and fan base. Early Access alone has seen more than a million players shell out $30-$60, a testament to its strong appeal, Bernstein analysts say.
Meanwhile, NetEase (NASDAQ:)’s ‘Marvel Rivals’ broke records, attracting 20 million players shortly after its launch. This achievement marks a strategic pivot for NetEase, which is now targeting a user base of 40 million with the previously hit ‘Naraka Bladepoint’.
Both titles have gained significant traction on platforms such as Steam, with concurrent users reaching 579,000 for ‘Exile 2’ and 481,000 for ‘Marvel Rivals’. Bernstein analysts emphasize that these games are well-positioned as live-service titles that can generate revenue for years to come.
The success of these startups highlights the strategic advantages of Chinese developers’ cost-effective R&D, innovative intellectual property, and freedom from the controversial cultural debates of Western gaming.
Bernstein maintains “Outperform” ratings on Tencent and NetEase, citing their ability to challenge Western competitors such as Blizzard. Electronic Arts Inc (NASDAQ: ) in the lucrative live services gaming space.
