Strong showing for ChinaJoy a great sign for slumping smartphone industry
Qualcomm kicks off ChinaJoy with Chinese Telcos and OEM Partners
The annual ChinaJoy event wrapped up last week in what was billed as “Asia’s largest digital entertainment'“ expo. It definitely lived up to its billing and quite possibly one of the largest mobile conferences in the world this year given the situation around the world and likely to remain so as the 2021 editions of CES and MWC will likely be virtual only.
The gaming industry has been one of the bright spots during the pandemic, and its popularity was on display at the packed four day event in Shanghai. China’s post 80’s through 10’s turned up in droves to try the latest games and take home the swag bag from their favorite gaming companies. Analysts and investors have also caught on to the trend, with Tencent’s valuation surging over 40% this year, outpacing Facebook both in quarterly growth and in market cap for the first time in its history. In another bright spot, Singapore-listed SEA Ltd game developer saw an impressive 880% increase in valuation over the past 18 months on the backs of mobile gaming and strong e-commerce performance. Activation Blizzard, Netease, and many others also benefited from consumers, particularly young adults, having more time to spend on games during the pandemic.
Gaming’s strong performance is especially crucial this year, as overall Smartphone growth is forecasted to be negative as major North American and European markets continues to recover from the pandemic. With 5G caught in the trade war controversy, consumer interest in 5G are lukewarm at best, coupled with the fact that carrier deployments around the world have been slowed by the trade war and the pandemic. That leaves China, with the central government’s support, 5G is now available in 50 major cities and subscribers now total over 108 million based on figures released by China Mobile and China Telecom. Gamers, who tend to be early adopters of technology, are one of the driving factors in the 5G adoption as the latest handsets all come with the fastest processors along with 5G connectivity. According to analysts, 5G cloud gaming services are expected to drive the next wave of growth in the sector as 5G allows better graphics and more complex games to be run on more powerful hardware that will be streamed over to the gamer’s device.
With that said, Smartphone makers are increasing their marketing towards the gamers audience as a driver of growth. Qualcomm, traditionally a B2B brand, continues to invest heavily together with their OEM partners to showcase the latest handsets based on the Snapdragon Elite Gaming platform. Market leaders, such as Oppo Vivo and Xiaomi have also released gaming centric models and new sub-brands, such as Xiaomi’s Black Shark to specifically target the gamers market. As kids and young adults return to school in the Fall and their daily lives return to normal, it remains to be seen whether gaming can sustain the momentum in driving 5G adoption and handset upgrades.