(Yicai) Sept. 12 -- The Chinese gaming industry has found itself in a survival of the fittest situation where large developers share most of the markets, and small- and medium-sized ones are left to fight for crumbs.

In 10 to 20 years, most second- and third-tier gaming firms will be gone, while those that survive will become leading industry players, said Lu Hongyan, chairman and general manager at Chinese online game developer G-Bits Network Technology. Expenses are surging, but returns do not grow at the same pace, and investors are no longer willing to spend as much as before, Lu noted.

Large developers achieve stable growth thanks to their influential intellectual properties, ability to integrate resources, and solid global presence, said Jiang Xiaoxiao, managing director at China Insight Consultancy.

Meanwhile, smaller firms are forced to explore new growth directions to survive, such as minigames and overseas market expansion, with many of them still shutting down because of the fierce competition, Jiang added.

For example, 37 Interactive Entertainment saw its revenue jump 18 percent to CNY9.2 billion in the first half of the year from the same period last year, mainly because of a great performance from its WeChat minigames.

Century Huatong Group’s revenue from the game sector surged 73 percent to CNY8.5 billion (USD1.2 billion) in the period, thanks to its hit game Whiteout Survival, which was the highest-grossing Chinese game overseas in July.

The gaming industry is facing some struggles on a global level, with layoff waves still ongoing. About 11,500 employees have been fired by gaming companies so far this year, more than last year’s total of 10,500, according to real-time statistics from Game Industry Layoffs.

Editors: Shi Yi, Futura Costaglione