China's gaming industry soars, "Black Myth: Wukong" breaks records

In good news for China's gaming industry, "Black Myth: Wukong," an action game set in mythological China, has shattered global sales records within days after its launch. This achievement comes on the heels of Beijing's recent gaming crackdown, which had cast a shadow over the industry's global ambitions.

"Black Myth: Wukong" sold over 10 million units within three days of its release on August 20, 2024. By the tenth day, it remained the top-selling game globally and ranked second in the U.S. by revenue on the steam platform, where it is priced around $60 or more.

Further, Dino Ying, chairman of Hero Games, which co-published the game and was an early investor in its developer Game Science, shared his thoughts on the game's success. "I think the next triple-A game is likely very close, because Black Myth: Wukong has shown everyone that a China-made AAA (Triple-A) game can reach such high global sales," Ying said in an exclusive conversation with CNBC.

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Ying also mentioned that he is aware of at least one other AAA (Triple-A) game currently under development, though he declined to provide a specific timeframe. He emphasized that future game releases from his company will have a global strategy from the outset and predicted that foreign AAA (Triple-A) game developers will increasingly tailor their games to appeal to Chinese players.

Market potential, historical significance and cultural appeal

China's massive gaming market, with 600 million gamers, presents a significant opportunity for game developers. Ivan Su, a senior equity analyst at Morningstar, noted that the reason China had not previously developed its own AAA games were due to the lengthy and costly production process. However, "China is a big country. We’re talking about 1 million concurrent players," Su said.

The game's success is also attributed to its rich cultural elements. "Chinese games often incorporate rich cultural elements that appeal more and more to a global audience," said Ashley Dudarenok, founder of China digital consultancy ChoZan. "This unique cultural flavor sets them apart from games developed in other regions".

Ying highlighted the game's cultural significance, stating, "If I create a new thing, I don’t know if people will like it. But something that’s lasted 1,000 years, people will definitely like it." The game's development involved scanning and replicating designs from ancient Chinese temples to enhance its immersive feel.

In addition to mainstream successes, independent Chinese games are also gaining traction. Shanghai-based Cotton Game, with a staff of 70, won the 2024 award for best development team in indie games from the French-supported Game Connection organization and ChinaJoy. Their game, "Sunset Hills," which took five years to draw by hand, launched on steam after raising $13,000 on Kickstarter.

The success of "Black Myth: Wukong" also reflects a more favorable regulatory environment in China. After suspending new game titles and limiting gaming hours for minors in 2021, Beijing has started to approve games again. "Personally I think in the past two years the regulation is increasingly respectful of the game industry and is beneficial to its development," Ying said.

Growth of domestic game sales in China and its future prospects

With domestic game sales in China reaching 147.27 billion yuan in the first half of 2024 and overseas sales of China-developed games rising to $16.4 billion in 2023, the future looks promising for China's gaming industry. As Ying noted, "We don’t know why it was preserved over so many years. But we just need to respect the original artisans". This breakthrough by "Black Myth: Wukong" signals a new era for China's gaming industry, one where both mainstream and indie developers are poised to make significant global impacts.