Key Takeaways
China's gaming sector demonstrated significant resilience in the first quarter of 2026, with overseas sales rising 32% year-over-year, a new Goldman Sachs report stated.
"We expect the strong momentum to continue," Goldman Sachs analysts said, citing multiple new game launches as the market enters its peak season.
The report detailed a 13% year-over-year increase in domestic revenue for Chinese game publishers, complementing the 32% surge in overseas sales. The bank maintains a positive view on key players, forecasting double-digit full-year gaming revenue growth for Tencent (00700.HK) and a re-acceleration for NetEase (09999.HK) starting in the second quarter.
The bullish outlook comes as sector valuations are near a five-year historical low, suggesting a potential entry point for investors. The upcoming launch of titles like Bilibili's (09626.HK) new "Three Kingdoms" game is expected to drive user growth and advertising revenue.
Goldman Sachs specifically highlighted Bilibili, anticipating that increased gaming advertising budgets in the second and third quarters will fuel strong performance. For NetEase, the bank's forecast for growth to re-accelerate from Q2 aligns with other market analysis pointing to the company's successful global expansion and benefits from AI-driven efficiency gains.
The report's findings are set against a backdrop of a strengthening global gaming market. According to a separate report from Drake Star, overall gaming M&A deal value hit a 15-month high in Q1 2026. Investment themes for the remainder of the year are centered on Artificial Intelligence, user-generated content (UGC), and augmented reality (AR).
The analysis suggests that despite low valuations, the fundamental growth drivers for China's top gaming firms remain intact, particularly in international markets. Investors will be watching the second-quarter results from Tencent and NetEase to confirm if the growth re-acceleration materializes as forecast.
This article is for informational purposes only and does not constitute investment advice.
