The future of Asia’s gaming landscape is bright, but it’s not without risks and challenges. China’s recent regulatory delays in new game approvals show how governments are seeking to strike the right balance between the need to regulate and a conducive environment for new entertainment forms to thrive. In spite of the industry's vulnerability to earnings volatility around product cycles and game launches, the increasing recurrent nature of gaming revenues should lead to steady growth in the long term.
A combined market cap of more than USD 1trn for gaming and related companies (in Internet, software, hardware and semiconductor space) offers a diversified way to participate in the booming Asian gaming industry through regional and global companies, in CIO's view. In particular, Chinese internet gaming companies and US-based software and semiconductor companies stand to benefit due to their superior margins, whereas we see limited opportunities in gaming hardware companies due to their lower margins.
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