Chinese Videogames Are Winning on the Global Stage

From “Genshin Impact” to “Age of Origins,” titles made by Chinese companies are winning hundreds of millions of players overseas. After working with Western and Japanese game companies for decades, China’s game industry is now producing more content with international appeal.

Almost a third—29 of the top 100—of the highest-grossing mobile games outside of China were developed by Chinese companies, according to market intelligence firm Sensor Tower. That increased from 24 titles in 2019 before major global hits were released by Chinese companies, edging out games made by American and Japanese studios.

The U.S. and Japan are where Chinese games are earning the most. In the first half of this year, the top 100 most lucrative Chinese mobile games generated $2 billion in the U.S., nearly a third of their overseas revenue, Sensor Tower data show. Another quarter came from Japan.

Chinese companies have set their sights on the $190 billion global videogame market as Beijing has tightened the issuance of new publishing licenses for games and capped game hours for minors.

Companies including Tencent Holdings and have acquired stakes in foreign studios and offered generous compensation to global talent, dedicating hundreds of people to develop one title.

“They move more quickly and are more open and aggressive in investing in game projects and talent than foreign competitors,” said Serkan Toto, chief executive of gaming consulting firm Kantan Games.

“Genshin Impact,” a role-playing game launched in 2020 by Shanghai-based studio miHoYo, is widely considered the first Chinese title that has achieved global success.

Its mobile version earned $5.16 billion globally in the three years after its debut. That made it the world’s third most lucrative title after Tencent’s “Honor of Kings,” which made money mostly from China, and “PUBG Mobile,” a mobile adaptation of a South Korean hit, Sensor Tower data show.

From its name to its anime-style art, “Genshin Impact” has strong Japanese features. But it creates story lines and territories based on global culture from medieval Germany to Japan’s Tokugawa shogunate era centuries ago.

“At first glance, it was a Japanese game to me,” said Kazuya Ishida, a 22-year-old college student in Tokyo. He added that he couldn’t find a mobile game of similar genre and quality in Japan at the time.

At the September Tokyo Game Show, Ishida waited in line for an hour and a half to try miHoYo’s turn-based role-playing game “Honkai: Star Rail” for 10 minutes. Its mobile version, which launched in April, generated around $500 million in global revenue in its first three months, matching the $515 million opening results of “Genshin Impact,” according to Sensor Tower. Revenue from the U.S. and Japan accounted for more than a third of the total.

In October, miHoYo kicked off a concert tour in eight countries with local orchestras playing music from “Genshin Impact.” Game-music concerts are a popular marketing and community-building strategy overseas. Tickets for most cities, including Los Angeles and New York, sold out within minutes.

“Genshin Impact” as well as zombie apocalypse titles “Puzzles & Survival” and “Age of Origins” are recent examples of Chinese titles that mimic foreign aesthetics and gameplay and have become hits overseas.

For decades, the Chinese industry accumulated know-how through labor-intensive work such as art and design that global game companies delegated to China. While Western and Japanese studios have been traditionally strong in consoles, Chinese companies have developed strengths in mobile games, an area that now accounts for half of the global videogame-industry revenue according to gaming-market research firm Newzoo.

These days, the Chinese industry is trying to go beyond mimicking foreign successes.

Recently, “Black Myth: Wukong,” a martial arts, action role-playing game scheduled for release next year, created buzz on social media. Rooted in the Chinese epic “Journey to the West” about the pilgrimage of a Buddhist monk and three animal spirits to India, the title features Monkey King, the protagonist of the tale.

The game was positively received by demo players on X—formerly Twitter—and Reddit, who said they were impressed by its high-quality art and dark, bizarre fiction style.

“You take Chinese mythology and stories like this and apply Western genres. This is the way to be successful,” said Seattle-based Mark Long, who heads the studio that makes the shooter game “Shrapnel.”

As Chinese games become more popular, issues such as censorship and data security could come under scrutiny overseas—similar to what happened with short-video app TikTok. Some global players said they found titles including “Genshin Impact” censoring politically sensitive terms such as “Taiwan” and “Hong Kong” in their chat features. U.S. security experts have also raised concerns about Beijing’s potential access to data harvested from games. Companies say that user data is stored locally and its use is limited to business purposes.

Toshihiro Nagoshi, a former chief creative officer at Japan’s Sega—part of Sega Sammy Holdings—and the creator of the mafia series “Yakuza,” left Sega with a team of developers in 2021 and set up a studio under NetEase. His studio is developing a console game targeting global players, helping NetEase reach gamers on platforms beyond mobile games.

“Players are becoming less and less focused on ‘who made the game and from what country’ as long as the game is appealing to the market,” Nagoshi said.

Write to Raffaele Huang at raffaele.huang@wsj.com