While the runaway success of Chinese mainland-made video game Black Myth: Wukong has sparked envy and admiration in Hong Kong, industry insiders say the city’s high labor costs and compact market size make it challenging to replicate such a big-budget title, but believe Hong Kong could leverage its film-making expertise and wealth of intellectual property to carve a separate niche.

Hong Kong is not a newcomer to the gaming industry — it has produced globally successful titles before, like the 1990s 2D action game Little Fighter 2 that saw more than 50 million downloads worldwide. More recently, local developer Mad Head’s mobile game Tower of Saviors reached a HK$2.6 billion ($330 million) valuation in its first year.

However, higher labor costs and smaller market size compared with the mainland, as well as historical underinvestment in the video games industry make it a challenging path for Hong Kong to pursue the kind of high-budget, Hollywood-caliber AAA productions like Black Myth: Wukong, which can cost up to 20 million yuan ($2.8 million) per hour of gameplay to develop.

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“Given Hong Kong’s relatively high salary levels and focus on business and trade, it appears to be hard to grow competitive large games companies here, since they would have to compete with the lower salaries of the mainland and elsewhere,” said Espen Aarseth, chair professor of game studies at the City University of Hong Kong.

Moreover, the relatively small size of its market and a lack of investment has hindered the growth of Hong Kong’s game industry, noted Anthony Fung Ying-him, professor of School of Journalism and Communication at the Chinese University of Hong Kong.

“Due to legal restrictions, the city’s games companies cannot operate in the mainland, so their main market is local and some companies will expand their business to Southeast Asia. However, the competition there is fierce,” Fung said.

Even in the mainland, which is a vast market with 1.4 billion people, such single-player games have traditionally struggled to sell well, partly because of piracy, and also due to high development costs and a lack of recurring revenue model, said Zeng Xiaofeng, vice-president of Niko Partners, a market research firm specializing in video games.

It had taken almost three decades for the actual sales revenue of the mainland game market to reach the milestone of 300 billion yuan in 2023 since the first foreign game studios came on stream in the 1990s.

Triple-A games do not tell the whole story of the global gaming landscape, and there are also big-budget titles that have struggled to find an audience, Aarseth said. Producing smaller, but more agile games may be a more viable and cost-effective route for Hong Kong, a market mainly comprised of small studios which produce mobile and online games.  

From another perspective, Hong Kong has produced international award-winning animated films like the movies centered on the beloved cartoon pig McDull, which demonstrates the city has the professionals and technologies in film-making that can be applied to game development, said Albert Yu Ka-ho, senior lecturer of game design and animation at the Hong Kong Baptist University.

“Hong Kong’s advantage in game industry is its unique culture IP,” added Fung, who is also an adviser for the Hong Kong Game Industry Association.

He cited examples such as the iconic Hong Kong crime film series Young and Dangerous, acclaimed martial arts novels by Louis Cha Leung-yung — also known as Jin Yong — which have spawned many movie and television adaptations, as well as this year’s blockbuster Twilight of the Warriors: Walled In, all of which have gripping narratives and rich settings that could be ripe for development into adventure games.

Fung said he believes that Hong Kong is better positioned to be an IP exchange platform when it comes to the city’s role in the global gaming industry.

The gaming industry’s connection with established IPs can be underscored by smash-hit titles in the North American market. Data from market analytics firm Circana show that the top-selling game in 2023 was Hogwarts Legacy, an adaptation of the Harry Potter book series. The game sold more than 12 million copies within two weeks of launching. Similarly, Marvel’s Spider-Man, based on the Marvel Comics superhero, ranked fourth on the best-seller list.

Black Myth: Wukong shows that it is not just foreign IPs driving gaming’s biggest hits. The game sold over 10 million copies in its first 83 hours, with the number of peak concurrent players exceeding 3 million.

Industry analysts and players commented that the game’s source materials — the 16th-century Chinese epic Journey to the West and its legendary protagonist Sun Wukong, or The Monkey King — had made this one of the strongest debuts in global gaming history.

READ MORE: Chinese video game 'Black Myth: Wukong' takes US market by storm

The developer Game Science is not alone in trying to tap into the fan base of this legendary monkey superhero. The 2015 animated film Monkey King: Hero is Back grossed nearly 1 billion yuan at the box office, and the long-running Japanese manga Dragon Ball, which features a character inspired by Sun Wukong, has been translated into 24 languages and sold in over 40 countries and regions.

The success of Black Myth: Wukong has proven that there is strong consumer demand for games with excellent cultural elements and high-quality content, said Chen Chen, senior analyst at digital economy consultancy Analysys.

“In a similar line of thought, Hong Kong studios can also explore the rich culture that has made Hong Kong cinema successful in the past,” Yu noted.

Contact the writers at irisli@chinadailyhk.com, thor_wu@chinadailyhk.com