There's been some major shifts in the gaming industry lately.
Chinese gaming companies are pulling back from international markets - but here's the twist: it's not because they're struggling. If anything, it's because they're getting stronger at home.
Let's talk about the game that changed everything: Black Myth: Wukong. According to Niko Partners, this title from Game Science a relatively small Chinese studio with just 150 people, became 2024's top-selling premium game. That's huge!
Here's what makes this extra impressive: Game Science did this with a $70 million budget. For comparison, many Western AAA games often cost hundreds of millions to develop. Here are some recent examples:
Call of Duty: Black Ops Cold War (2020): $700 million
Call of Duty: Modern Warfare (2019): $640 million
Call of Duty: Black Ops III (2015): $450 million
Horizon Zero Dawn (2017): $212 million
Marvel’s Spider-Man 2 (2023): $315 million
Cyberpunk 2077 (2020): $316 million
The Last of Us Part II (2020): $220 million
[Note: The budget for Call of Duty was revealed during Activision's response to the Uvalde school shooting, while the budget for Spiderman 2 became known due to an Insomniac hack in December 2023.]
We're also seeing other Chinese success stories. Games like Genshin Impact, Naraka Bladepoint, and Wuthering Waves have proven that Chinese developers can nail it across platforms - from mobile to PC and console.
Now, about that international pullback - it's partly due to new regulations, especially in the US. The PAFACA law that kicked in January 2025 has definitely complicated things for Chinese companies.
PAFACA primarily targets TikTok, but its implications extend far beyond.
The law's immediate impact was felt on ByteDance-owned gaming titles, including the popular Marvel Snap and Watcher of Realms, which were removed from US app stores.
In response, Marvel Snap's developer, Second Dinner, quickly switched to a US-based publisher to keep the game available.
In early 2025, the US Department of Defense labeled Tencent as a "Chinese military company" – a designation the company strongly disputes.
Further, due to antitrust concerns issue, the Department of Justice has led Tencent to remove two directors from Epic Games' board.
In the most recent case: NetEase cut jobs at the Seattle office, particularly affecting its Marvel Rivals development team. This comes as a surprise as Marvel Rivals is such a huge success for the company gaining over 40 million players in just 2 months!
But it seems they're not backing out of the US due to regulatory issues. They have also closed or reduced funding for several other overseas studios. We're talking about Ouka Studio in Japan, and Worlds Untold in Canada.
Reports suggest that the industry giants are realizing they might not need massive Western operations to create globally successful games.
Remember when everyone thought you needed Western studios to make "global" games? Yeah, that myth's pretty much busted now.
The cost factor is significant too. Running international studios is expensive, and development cycles are often longer. Chinese developers are showing they can work faster and more efficiently.
It's worth noting that companies like Tencent and NetEase aren't completely abandoning international markets. They're just being smarter about where and how they invest.
The quality of Chinese game development has skyrocketed. Black Myth: Wukong didn't just sell well - it showed that Chinese developers can create games that stand shoulder-to-shoulder with any AAA title.
What's particularly impressive is how Chinese studios are adapting their mobile game expertise to other platforms. The transition has been remarkably smooth.
This shift is actually creating a more interesting global gaming landscape. Instead of Chinese companies trying to "go Western," they're bringing their own unique development style to the global market.
Their upcoming ventures like Tides of Annihilation and Phantom Blade Zero are also gaining traction as gamers can't stop praising their beautiful visuals.
What other upcoming Chinese games are you excited about? And what do you think about this change in strategy?
Comments