The value of China’s console gaming market may rise to $2.46 billion by 2025, a new study has shown, as Beijing relaxes its grip on an industry that operated to a large extent underground before 2015.

The number, which includes spending on consoles and on the games played on them, represents a 33.7% jump from 2020, when the market was valued at $1.84 billion, according to a report by research firm Niko Partners.

The number of console gamers in China is likely to grow even faster, jumping from 13.2 million last year to 23.9 million in 2025, with each projected to spend an average of $91.30 on games and related services by 2025, up 8.7% from 2020, the report said.

“The increase in spending through 2025 will primarily be driven by ongoing sales of the Nintendo Switch, a new console cycle with PlayStation 5 and Xbox Series X/S and increased demand for high-end games from Chinese gamers,” Niko President Lisa Hanson said. She added that other areas of potential growth will include subscriptions, free-to-play and cloud gaming.

Despite decent growth, China’s console gaming market will remain marginal in China’s overall gaming market, with the report predicting revenue derived from the business segment will only account for 4.3% of the country’s total gaming revenue in 2025, compared with 4.1% in 2020.

China’s console gaming market has long been lackluster thanks to a government ban on the sale of foreign-made consoles and their games, leaving consumers to buy products like Sony’s PlayStation on the gray market. The ban was lifted in 2015.

The improved business environment in China has led to the entry of some major Chinese companies into the business. In March 2020, mobile gaming giant Tencent gained approval to offer Nintendo Switch games in China, with plans to work with the Japanese videogame company to produce console games for American gamers. Three months later, its archrival NetEase announced the establishment of a Tokyo-based game studio to produce next-generation console games.

Contact reporter Ding Yi (yiding@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)

Related: NetEase Opens Console Game Production Studio in Tokyo