China will take the place of South Korea to become the second largest video game market in the world by 2021, according to the latest report released by PwC, Yicai.com reported.

In 2017, the number of video game players in China reached 580 million and the revenue of the industry was US$20 billion.

The industry is expected to grow at a compound rate of 23.7% annually over the next five years, driving the revenue to hit US$32 billion by 2020 to eventually surpass South Korea.

Meanwhile, e-sports is also experiencing a surge in China where currently there are an estimated 200 million e-sports enthusiasts.

Over the next five years, the e-sports sector is expected to maintain a compound annual growth rate of 23.7%. By 2020, its revenue could reach 338 million yuan, exceeding that of the US.

Tencent and NetEase will continue to be the two giants of video games, accounting for more than 70% of the market share in China.