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Online game developer and operator The9 Limited has signed a joint venture agreement with mobile game distributor Qing Cheng.
The9 will hold a 51% stake in the company, while Qing Cheng will own 49%. The venture will serve as The9’s flagship subsidiary for mobile game operations in China’s lower-tier markets.
Qing Cheng will leverage its distribution channels and strategic game development partners to supply and operate mobile games for these markets.
The distributor aims to generate over ¥80 million ($11m) in profit in 2025 through the deal, with at least 50% annual growth in 2026 and 2027.
Qing Cheng, founded in 2020, is a mobile game distributor in China focused on providing games for cities and users with lower spending power. It claims to have 88.7 million registered users, 5.9 million MAUs, 0.6 million DAUs, and ¥4.4 billion ($29.4m) in cumulative user payments.
Dominating a “sinking market”
“According to the QuestMobile 2024 Sinking Market Insight Report, as 5G and mobile internet applications continue to explode in China, the number of users in lower-tier markets, including third-tier and lower-tier cities, continues to grow,” said The9 executive director and CFO George Lai.
“The number of mobile internet users reached 647 million, accounting for 52.6% of the entire mobile Internet market in China. Our cooperation with Qing Cheng will definitely bring our mobile game operation and distribution businesses in China’s sinking market to the next level.”
Qing Cheng CEO Peng Cheng Bin also commented: “We have established a unique network covering third-tier and lower-tier cities through in-depth layout of offline distribution channels and designated gaming KOLs.
“Such sinking market channel advantage enables us to dominate the sinking market and form a competitive barrier that is difficult to replicate.
“We are using e-commerce way like ‘¥10 billion subsidy’ to regularly launch in-game discounts, points rewards and other activities to enhance gamers participation and loyalty in China’s sinking market. The only difference with e-commerce is that our incentive is virtual which does not increase our actual cost.”
