Recently, AI-driven short dramas have surged in popularity, captivating audiences worldwide.

Data from QuestMobile reveals that in May 2026, the average monthly usage time per user for domestic short drama apps soared to 26.9 hours, nearly doubling the 14.7 hours spent in the traditional online video sector.

This explosive growth has sparked concerns in the capital market, particularly about its potential impact on the gaming industry.

With Tencent's stock price under persistent pressure, a new worry has emerged: Are AI-driven short dramas cannibalizing users' entertainment time, and could they pose a significant threat to the gaming industry, even challenging Tencent's primary revenue stream?

At first glance, this concern seems valid.

After all, users have a finite amount of time each day. Increased time spent on short dramas inevitably means less time for gaming. Moreover, AI is significantly slashing video production costs, promising a continuous influx of short drama content.

However, a retrospective look at the internet content industry's evolution over the past decade reveals that similar scenarios have unfolded before.

Over the past ten years, short videos have nearly revolutionized attention allocation across the internet, affecting traditional TV, news, long-form videos, and numerous other content sectors.

The gaming industry has not been entirely immune either. During the initial surge of short video popularity, mobile gaming experienced declines in user engagement and market share.

Yet, interestingly, the gaming industry has continued to flourish. By 2025, domestic gaming market revenue had exceeded 350 billion yuan, hitting an all-time high.

Today, let's delve into who AI-driven short dramas are truly competing with and why the gaming industry might be more resilient than the market perceives.

/ 01 / The Ascendancy of AI-Driven Short Dramas: Who's Losing Out on User Time?

How remarkable is the growth of AI-driven short dramas?

QuestMobile data indicates that as of February this year, the monthly active users (MAUs) in the domestic short drama industry reached 718 million, with Hongguo Free Short Dramas alone boasting 304 million MAUs.

What does this signify?

In 2025, the entire domestic gaming industry had 683 million users, placing it in the same league as short dramas. Hongguo's MAUs alone surpass 80% of Bilibili's.

By July this year, Hongguo Free Short Dramas' daily active users (DAUs) reached 168 million, outpacing the combined DAUs of the four major long-form video platforms: iQIYI, Tencent Video, Youku, and Mango TV.

Even more striking is user engagement. In the AI comic drama sector, Hongguo Free Comic Dramas amassed 24 million MAUs just four months after launch, with an average daily usage time per user of 90.7 minutes.

For comparison, Kuaishou's average daily usage time per DAU in Q4 2025 was 126 minutes. A newly launched AI comic drama product is already nearing the user engagement levels of established short video platforms.

When examining the entire short drama industry, this trend becomes even more pronounced.

QuestMobile data shows that in May 2026, the average monthly usage time per user for domestic short drama apps reached 26.9 hours, nearly double the 14.7 hours in the traditional online video industry.

From user growth to time penetration, short dramas are rapidly encroaching on the space of other entertainment content.

This raises a question: Where is all this additional viewing time coming from?

In fact, a similar phenomenon occurred over the past decade with the rise of short videos.

QuestMobile data indicates that in 2017, short videos accounted for just 5.5% of total time spent on China's mobile internet. By 2022, this share had grown to 28.5%, making short videos one of the most time-consuming app categories.

In just five years, short videos have nearly reshaped attention allocation across the entire internet.

The sectors most obviously impacted have been traditional TV, news, and long-form videos.

Firstly, traditional TV. Data from the National Radio and Television Administration shows that from 2017 to 2023, domestic TV advertising revenue plummeted from 96.8 billion yuan to 51.6 billion yuan, a nearly 47% decline over six years.

While factors such as the digital shift of advertising budgets and mobile internet penetration played a role, the rise of short videos further intensified competition for user attention and advertising dollars.

News has also been affected. From 2019 to 2022, the share of time spent on comprehensive news apps fell from 7.9% to 6.7%. More users are turning to platforms like Douyin and Kuaishou for news, knowledge, and lifestyle content, eroding the value of traditional news apps as traffic gateways.

The impact on long-form videos has been even more pronounced. From June 2017 to the end of 2018, the share of time spent on comprehensive video platforms fell from 10.9% to 8.3%, while short videos surged from 2% to 11.4% in the same period, overtaking long-form videos.

Even super apps like WeChat haven't been spared. From 2019 to 2022, the share of time spent on instant messaging apps fell from 26.5% to 20.7%.

Of course, a decline in time share doesn't necessarily mean these industries are shrinking in terms of user base or revenue. But these changes reveal an important pattern.

When a new content format can meet existing user needs at a lower cost and higher efficiency, the competitiveness and commercial value of older content formats may suffer. The closer the experiences provided by the two formats, the more pronounced the substitution effect tends to be.

Following this logic, the areas most vulnerable to AI-driven short dramas become clearer.

Firstly, traditional live-action short dramas.

Both offer highly similar storytelling and emotional experiences, competing for the same audience. However, AI can dramatically reduce costs for actors, filming, and production, boosting content production efficiency by orders of magnitude.

This means that some of the competitive advantages traditional live-action short dramas once had—based on production capabilities and cost structures—are rapidly eroding.

Secondly, some general entertainment short videos, as well as formulaic, low-quality long-form video content.

These products also rely on plot twists, emotional stimulation, and binge-watching to attract users. When AI-driven short dramas can produce similar content at lower costs, users may naturally allocate more time to short dramas.

Especially for products with highly homogenized content and lacking unique experiences, they may face greater pressure on traffic and monetization in the future.

Following this logic, the gaming industry becomes a very worthy subject of discussion. After all, gaming also consumes a significant amount of users' entertainment time and relies on continuous content supply and user spending.

But the question is: How much of the entertainment experience provided by gaming can be replaced by AI-driven short dramas? In fact, the competition between short videos and gaming over the past decade already provides a compelling answer.

/ 02 / The Market Has Overestimated the Impact of AI-Driven Short Dramas

The diversion of attention from gaming to short videos began seven or eight years ago.

From 2018 to 2019, the average daily usage time per user for domestic mobile games fell from 39.2 minutes to 37 minutes, with their share of total internet time dropping from 10% to 8%. During the same period, short videos' time share grew from 8% to 13%.

But interestingly, this diversion of attention did not lead to a long-term decline in the gaming industry.

In 2017, domestic gaming market revenue was 203.6 billion yuan. By 2025, this figure had grown to 350.8 billion yuan, an increase of over 70% in eight years, reaching an all-time high.

User numbers also continued to grow. QuestMobile data shows that in August 2025, MAUs for domestic mobile gaming apps reached 698 million, up 7.9% year-on-year, with an average daily usage time per user of 114.4 minutes.

In other words, the rise of short videos did not change the long-term growth trend of the gaming industry.

This raises an important question: Why, despite both being content formats, have short videos (and short dramas) failed to disrupt gaming?

To understand this, we first need to clarify the differences between gaming and short dramas.

The most direct difference lies in the nature of the enjoyment they provide.

Short dramas rely on plot stimulation. Whether it's a CEO's comeback, revenge drama, or sweet romance, users simply follow the story and watch the protagonist rise step by step, gaining emotional satisfaction.

But gaming is different. Take role-playing games (RPGs) as an example: players need to explore maps, complete quests, upgrade equipment, and develop characters themselves. Every bit of progress comes from their own investment.

To put it bluntly, with short dramas, you watch someone else become a CEO; with games, you become the CEO step by step yourself.

In competitive games like Honor of Kings or Delta Force, the difference is even more pronounced.

Players need to operate, strategize, and coordinate with teammates. Winning brings a sense of accomplishment, and losing might make them want to try again. This kind of feedback is hard to achieve through mere storytelling.

Moreover, many people play games for another important reason: social interaction.

Take Honor of Kings, for example—many people log in just to play with friends. For character-building games, players invest significant time and money, gradually accumulating characters, equipment, and accounts, making them more likely to stick with the game long-term.

These factors combine to create a unique user engagement and monetization model for gaming.

This explains why, despite short videos capturing so much user time in recent years, gaming revenue has continued to grow.

Of course, this doesn't mean all games are immune to the impact of AI-driven short dramas.

The gaming industry is vast, and differences between game genres can be greater than those between gaming and short dramas.

Over the past few years, two interesting trends have emerged in the gaming industry.

On one hand, PC games, cross-platform games, and high-quality, hardcore games have become increasingly popular. Players are willing to spend more time pursuing better graphics, more complex gameplay, and more immersive experiences.

On the other hand, casual games have also seen rapid growth. Many people just want to play something simple for a few minutes during their commute or lunch break to relax. In 2025, domestic client game market revenue grew by 14.97% year-on-year, while mini-game market revenue grew by 34.39% year-on-year.

What AI-driven short dramas might truly take away is the user time of some casual, light games.

The reason is simple: the usage scenarios for these games and short dramas are too similar. Some casual games involve just a few taps, watching an ad, and collecting rewards—very low operational thresholds, focusing on instant feedback.

Therefore, the impact of AI-driven short dramas on gaming is likely concentrated on a portion of casual, light games. For hardcore games, there are currently no signs of their core consumer demands being significantly replaced.

Ultimately, while AI-driven short dramas are reallocating attention, what truly determines the extent of industry disruption is the substitutability between content formats and their respective abilities to create consumer value.

From this perspective, there is currently no evidence of a systemic disruption to the gaming industry by AI-driven short dramas.

By Qi