Reuters reported The CEO of Chinese gaming company XD Network is planning to leave China in 2023. As the growth rate is dampened by Chinese government regulations, it seems to be a plan to make a breakthrough to enter the overseas market.
XD Network (Chinese name 心动网络) is a game company based in Shanghai, China. It was founded in 2009 and was listed on the Hong Kong Stock Exchange in 2019. It is operating a mobile game platform ‘Tap Tap’ in China.
XD Network, like other Chinese game makers, had a rough year in 2021. The game business, which accounts for the majority of sales, decreased by 13.8% year on year. In particular, sales of free to play games, which account for the majority of game sales, fell by 17% year on year. Paid game sales increased 42% year on year, but paid game sales accounted only for 7.6% of total sales.
The reason for the decline in sales is believed to be the Chinese government's game regulations. The Chinese government strengthened anti-addiction regulations in August 2021. And since then, no game version number has been issued for about eight months. As a result, the growth of leading Chinese game companies has slowed. Small and medium-sized game companies that maintained their business by releasing a number of casual games were forced to close their business altogether.
There are many Chinese game companies whose growth has been slowed by the Chinese government's regulations. These companies have recently turned their eyes more actively to overseas markets. Meanwhile, Reuters reported that Huang Yi-Meng, the founder of the XD network, is planning to move his residence outside of China.
According to the article, the reason for CEO Huang Yi-Meng moving his residence abroad has to do with his family. And CEO Huang Yi-Meng will strive to grow overseas business in the future.
However, it is not easy to develop a business abroad now. This is because large Chinese game companies such as Tencent and NetEase have already entered major countries such as the US, Korea, and Japan. And the XD Network doesn't have as much capital as big players like Tencent.
The current situation of the XD network is similar to that of many Chinese game companies. In China, it is blocked by regulations, and there is no special means to conduct business abroad.
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