Benzinga | Aug 16, 2021 04:07AM EDT

Chinese Tech Giants Take Aim At PlayStation, Xbox As Country Warms Up To Gaming Consoles

Tencent Holdings Ltd (OTC:TCEHY) and NetEase Inc (NASDAQ:NTES) are among gaming companies eyeing China's fast growing console market, CNBC reported on Sunday.

What Happened: The console market is still small in China and accounted for 4.1% of the entire gaming spend in the country last year, according to market intelligence firm Niko Partners.

Homegrown players are stepping up efforts in the space. Just last week, NetEase launched a high-profile game called "Naraka: Bladepoint" -- a 60-person battle royale style game similar to "Fortnite."

Tencent has been focusing on gaming related acquisitions and investments that leaned on mobile and PC gaming but it is now shifting to companies making games for PC and console.

See Also: Alibaba Rival JD Plans A Gaming Foray: What You Need To Know

Why It Matters: Niko estimates China's gaming hardware and software market will reach $2.46 billion in 2025 from $1.84 billion in 2020.

A separate research from Newzoo estimates the global console market to be about $49.2 billion by the end of 2021, representing 28% of the worldwide games market.

Gaming consoles were banned in China until 2014 due to which developers have been strong in mobile and PC game development instead. Sony Group Corp (NYSE:SONY), Microsoft Corp (NASDAQ:MSFT) and Nintendo (OTC:NTDOY) are all eyeing China's growing market with their next-generation gaming consoles that they have recently launched in the region.

See Also: PlayStation 5 To Launch Next Month In China -- A Tricky Market For Gaming Consoles

Price Action: Tencent shares closed 1.31% lower at $60.23 on Friday and NetEase shares closed 2.54% lower $89.66.