China’s gaming and advertising industries set for comeback in 2023

After taking a battering in 2022, China’s advertising and gaming industries are poised for a comeback in the year ahead.

On January 9th the Swiss Investment bank UBS released its breakdown of China’s predicted economic growth in 2023. In line with the expected uptick in economic activity following the end of COVID-19 restrictions, the overall picture was positive with a 4.9% increase in GDP predicted. This falls far short of 2021’s 8.1% growth, but would still signal that China is on the road to post-pandemic recovery.

Gaming and advertising are significant contributors to China’s overall economic growth. Liu Yaokun, China internet and media analyst at UBS, expects a 6% growth in the gaming industry, which is striking in comparison to last year’s 7% decline. The last 18 months saw a significant dry spell for domestic gaming companies, in large part due to a host of new licensing regulations introduced by the National Press and Publication Association as well as an ongoing crackdown on youth gaming addiction.

The outlook for advertising is even more optimistic with a 15% growth rate expected for online advertising for 2023, up from 4% in 2022. Since companies’ advertising budgets are closely linked to COVID-19 restrictions, advertising revenue is expected to bounce back with the recent removal of restrictions.

According to UBS’s analyses from previous years, recovery is likely to be quicker for performance-based advertising, which is focused on directly generating sales, than for brand marketing, which aims to grow brand awareness and connection. This difference may affect brands’ choices on which mode of advertising to place emphasis on in 2023.

Whilst an improvement compared to 2022 seems inevitable for these industries, the extent of this improvement and its wider impact on China’s economy remains to be seen. The economic and political picture for the year ahead remains uncertain as COVID cases rack up and political chess moves are made.


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