Market Expansion of Domestic Gaming Firms in Shenzhen, China: Dilemma of Globalisation and Regionalisation

Abstract

China's domestic mobile gaming firms, such as Tencent, which has developed into the world's biggest gaming firm by revenues in a short span, have outweighed the leading counterparts in the Western advanced economies. Despite an increasing attention has been paid to the global investment of Chinese gaming firms, this paper argues that their market expansion has focused on the selected Southeast Asian countries. This arguement is developed through the aurthors' extensive field investigation and personal interviews with games developers and publishers in Shenzhen, where Tencent is located, during the early 2017 and late 2019. We showcase that the protective multi‐scalar institutions in which the Chinese gaming firms have dominated in the domestic market, have prevented the overseas market expansion of these firms. Although the government‐designated extra‐local inter‐firm collaboration has helped narrow the technological gaps and articulate China’s firms into the global production networks, the market gaps between the domestic and western economies have not been overcome in the expansion to overseas markets. This study sheds light on that the market expansion of Chinese gaming firms has stucked in a dilemma between globalization and regionalization. While China’s domestic gaming firms, particularly Tencent, have been evolving into lead firms in the global games production networks, their market power has been confined at domestic and regional levels.

Exploring the impact of digital transformation on technology entrepreneurship and technological market expansion: The role of technology readiness, exploration and exploitation

“…Moreover, literature confirms that the level of technological development assists businesses in expanding their market (e.g. Brodie et al, 2007;Yang & Chan, 2020). For instance, Petersen et al (2002) argue that the internet and evolution of technology have enabled firms to reduce their cost for searching new market opportunities, allowing them to constantly expand their market.…”

Transnational development cultures

“…Simon [10] has documented the logic and structures of the Chinese games industry, highlighting a focus on technology innovation and alignment with technology companies, as well as numerous complexities and tensions between government, industry, and market stakeholders. Yang and Chan [11] argue that while major Chinese companies such as Tencent have made advancements as global companies, most of these companies' growth is within Asian markets, and most Chinese games companies are yet to develop the capabilities to operate within the globalised creative industries.…”

Editorial: Creative industries at the intersection between local agglomeration, national regulation, and global networks

“…Both papers highlight the governments' role and impacts of regulations on the co‐production networks of films, while in different research areas and contexts. Yang & Chan (2021) examine the globalization of China's domestic gaming companies, particularly Tencent, the world largest gaming firm in terms of revenue, which originates from Shenzhen, one of the promising gaming industrial clusters in China. Their study shows a pattern of regionalization with focus of the gamers of Tencent's games on the markets in selected Southeast Asian countries, instead of the genuine globalization as expected.…”