Investing.com — Bernstein analysts have hailed December 2024 as a turning point for Chinese video game developers, highlighting the global success of Tencent Holdings (OTC:) Ltd's (HK:) 'Expulsion Path 2' and NetEase Inc's (HK:) ' Marvel Rivals'.
The games represent a major step forward in China's push to capture a bigger 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 notable competitor to Blizzard's 'Diablo II', boasting improved gameplay and a dedicated fan base. Early access alone saw more than a million players spend $30-$60, a testament to its strong appeal, according to Bernstein analysts.
Meanwhile, NetEase (NASDAQ:)'s 'Marvel Rivals' broke records, attracting 20 million players shortly after launch. This success marks the pivot of NetEase's strategy, now targeting users comparable to the 40 million achieved by its previous hit, 'Naraka Bladepoint'.
Both titles have gained significant traction on platforms such as Steam, with peak concurrent users reaching 579,000 for 'Road to Flight 2' and 481,000 for 'Marvel Rivals'. Bernstein analysts emphasize that these games are well positioned as live service titles, capable of generating revenue for years to come.
The launch's success also underscores the strategic advantages of Chinese developers, who value cost-effective R&D, intellectual property, and freedom from conflicting Western cultural discourses.
Bernstein maintains “Outperform” ratings on Tencent and NetEase, citing their potential to challenge Western rivals such as Blizzard and Electronic Arts Inc (NASDAQ: ) in the profitable live service playing field.