BofA: China’s Gaming Industry shifting gear with Record ‘Banhao’ Blitz and PC Renaissance

While the broader narrative around Chinese equities continues to oscillate between stimulus hopes and structural skepticism, the digital entertainment sector is quietly executing a pivot. A new research note from Bank of America Global Research, released on December 11, 2025, paints a picture of an industry that has not only stabilized but is evolving away from pure mobile saturation toward high-fidelity cross-platform growth.

Authored by analysts Alex Liu and Joanna Du, the report, titled "Play Pulse: China Online Game Tracker – Nov 2025," is crucial reading for investors tracking the pulse of the Chinese consumer. The takeaway is clear: the regulatory freezer has thawed, creating a flood of approvals, while legacy giants are finding new growth engines in PC gaming and overseas expansion to offset domestic mobile maturity.

Here is the breakdown of the current state of play in China’s video game sector.

The Macro View: PC is the New Mobile

Per data from China New Game Research (CNG) cited by BofA, the overall industry exhibited healthy resilience in October 2025. Total grossing revenue hit RMB 31.4 billion yuan (US$4.33 billion), rising 8% year-over-year (YoY) and 6% month-over-month.

However, the composition of that cash flow tells a more interesting story. The days of explosive, double-digit mobile growth appear to be moderating.

• Mobile Games: October grossing was RMB 22.6 billion yuan (US$3.12 billion), up a deeply modest 2% YoY. While this is an improvement from September's contraction, mobile's share of the total pie slipped to 72% from 76% last year.
• PC & Console: This is where the alpha is. PC game revenue surged to RMB 7.2 billion yuan (US$990 million), a massive 29% YoY jump.

The drivers here are "cross-platform" titles—games high-fidelity enough to run on PC but accessible on mobile—and flagship heavy hitters like Tencent’s Delta Force and NetEase’s Where Winds Meet.

The Regulatory Floodgates Open

Perhaps the most bullish signal for the sector’s long-term viability is the normalization of the "Banhao" (game license) approval process.

November 2025 marked the highest single-batch issuance in recent years, with regulators approving 178 domestic games and 6 imported games. Total licenses granted in 2025 have now surpassed 1,600, well above the levels seen in 2024. For investors who spent years worrying about arbitrary crackdowns, this consistent pipeline suggests a solidified truce between Beijing and the gaming sector.

Corporate Battlegrounds

BofA leverages data from QuestMobile and Sensor Tower to dissect the performance of the "Big Three": Tencent Holdings Ltd. (腾讯控股有限公司), NetEase, Inc. (网易), and Bilibili Inc. (哔哩哔哩).

Tencent: The New Flagship Arrives Tencent remains the distinct market leader, but the portfolio is shifting.

• Honor of Kings remains the largest title by Daily Active Users (DAU), providing a stable floor.
• The breakout star is Delta Force. In November 2025, Delta Force saw significant growth, with its DAU reaching 59% of Honor of Kings and surpassing Peacekeeper Elite by 129%.
• According to Sensor Tower iOS tracking, Delta Force and Fight of the Golden Spatula grew significantly, offsetting declines in older titles.

NetEase: A Mixed Bag NetEase is seeing divergence in its portfolio.

• Classic franchise Fantasy Westward Journey (FWJ) is trending upward, showing the staying power of legacy IP.
• However, titles like Identity V and Justice Mobile saw widening declines in domestic grossing.
• The Wildcard: NetEase launched Diablo IV on December 12, 2025. The market will be watching this launch closely as a catalyst for Q1 2026 performance.

Bilibili: Volatility Continues Bilibili faces a tougher domestic environment, with Sensor Tower tracking showing a 21% YoY decline in domestic mobile grossing for November.

• Sanmou grossing moderated post-anniversary.
• However, Azur Lane recorded a measurable uptick, offering some offset.

The Overseas Hedge

With domestic mobile growth slowing to low single digits, Chinese developers are increasingly looking abroad. In November 2025, self-developed games by Chinese companies generated US$1.8 billion in overseas markets, up 12% YoY. This was supported by content updates for mature titles like Arknights and incremental revenue from new releases.

Looking Ahead: The 2026 Pipeline

The report concludes with a robust pipeline that suggests the momentum will carry into the new year. The "Banhao" stability has allowed developers to firm up launch schedules for high-profile titles:

• Tencent: Expects to launch Nizhan: Future in Jan 2026, followed by the highly anticipated Honor of Kings: World in Spring 2026.
• NetEase: Following the December Diablo IV launch, Sea of Remnants is slated for 2026.
• Bilibili: Trickcal Re:vive launches mid-December 2025, with N-Card expected in the first half of 2026.

Bottom Line: The easy money in Chinese mobile gaming is gone. The market has matured. However, the BofA data confirms that the sector has successfully pivoted toward higher-quality, cross-platform experiences and global export, supported by a regulatory environment that is finally playing ball.