China-Headquartered Publishers Set Their Sights on Overseas Markets to Accelerate Growth Overseas Consumer Spend on Games From China game publishers continued to target lucrative global markets China-Headquartered Publishers outside their home turf and have seen increased success in markets USD (Billions) outside of APAC, particularly in the Americas at 140% from 2016. $8B Despite China’s freeze on game approvals, global consumer spend in games from China-headquartered publishers increased in 2018, albeit $6B at a slightly lower year-over-year growth rate. Although approvals for $1.4B +109% Two Year Growth new game titles will gradually resume in early 2019, Chinese firms will continue to push harder for international expansion, and mergers and $4B EMEA 90% $1.8B $1.1B acquisitions could become more common. AMER 140% APAC 105% $0.8B $1.1B The demand for mobile games was strong among gamers in China $2B $0.7B $2.9B with users leveraging VPN’s to access international marketplaces $1.9B such as Steam. $1.4B $0 2016 2017 2018 Note: Overseas is represented by all markets outside of mainland China; China-headquartered publishers only includes publishers headquartered in China whose parent company is also headquartered in China. Excludes foreign subsidiaries of China headquartered publishers. 24 COPYRIGHT 2019