This article is part of Sixth Tone Voices & Opinion’s end-of-year series reviewing how China’s AI, film, game, and VR industries evolved in 2025.

It was a good year for Chinese cinema. Total box office revenue had already surpassed last year’s figure by October. Nevertheless, a closer look at the numbers shows subtle shifts that reflect an industry in the midst of deep structural reconfiguration.

The classic strategies of blockbuster titles and releases timed with national holidays remain powerful drivers of the country’s cinema income. “Ne Zha 2” — China’s most popular movie ever — and murder-mystery “Detective Chinatown 1900,” two leading Spring Festival releases, also finished as the year’s first and third box office performers, respectively. “Zootopia 2,” released in late November, quickly climbed to second place in this year’s rankings.

Yet a closer examination of the chart reveals some emerging new dynamics. First, the long-held belief that release timings determine success no longer holds. Among annual theatrical windows, only the Spring Festival and summer holiday slots consistently produced top-10 performers. Movies released during Labor Day, National Day, New Year, and shorter holiday breaks underperformed. The crowding of numerous films into these peak periods often diluted individual box office returns.

Meanwhile, some films that skipped peak periods still excelled: both animated Hollywood import “Zootopia 2” and World War II movie “Evil Unbound” premiered outside major holidays. This suggests that audiences are becoming less tied to the idea of watching films only during major holidays. The Chinese film market is gradually shifting away from a dependence on holiday periods and toward more sustained, everyday movie consumption.

Secondly, viewers’ decisions are increasingly driven by a film’s quality and word-of-mouth buzz. October’s National Day holiday is traditionally the second-largest release window, after the Spring Festival. Yet this year’s National Day slate failed to place a single film in the top 10, largely because audiences were unimpressed with the quality on offer.

In contrast, the particularly strong box office performance of this year’s summer releases is directly linked to the high-quality films during that window, spanning several genres. “Dead to Rights,” animated films “Nobody” and “The Legend of Hei II,” costume drama “The Lychee Road,” comedy “The Stage,” and action film “The Shadow’s Edge” all received positive audience reviews, showcasing both the remarkable strength and potential of domestic film productions.

Thirdly, individual film revenues continue to shrink. Whereas holiday blockbusters once routinely surpassed 1 billion yuan ($142 million), such benchmarks are increasingly difficult to hit. Fewer films per season are turning a profit, and the share of titles able to recoup costs is declining.

These 2025 market shifts point to a deeper rift between the industry’s long-held mass-market mindset and the increasingly diverse realities of today’s “omnimedia era,” wherein audiences enjoy an ever-growing range of entertainment options. Drawing them into cinemas has become an ever harder sell — an issue Hollywood is facing as well.

Audience tastes, too, have grown more fragmented, making it harder than ever for a single film to win over a large, unified audience. Within this landscape of plurality, the traditional mass-market logic is steadily losing its effectiveness, and the familiar patterns that once defined the industry now face mounting challenges. This is why a new way of thinking, one centered on segmented audiences, is gaining ground. By treating different viewer groups as distinct targets, the industry can begin to meet a wider range of needs and adapt to a movie market defined by diversity rather than uniformity.

In film production, this means distinguishing between mainstream commercial films and those for a segmented audience. The former, akin to today’s mass-market films, still operate under a high-investment, high-return model, but their overall number should gradually decline.

At present, only three types of projects truly lend themselves to this approach. The first is what we might call IP-based films: theatrical works that, within an omnimedia environment, have the capacity to drive cross-media world-building and serve as catalysts for story universes and marketing ecosystems. The second type emphasizes an audiovisual impact attainable only in technologically advanced cinemas. The third is high-empathy cinema: films that appeal to widely held sentiments — for example, around China’s World War II experience — and translate those shared feelings into substantial box office returns.

Commercial films for a segmented audience, by contrast, target specific groups of viewers based on factors such as taste, region, or preferred genres. This is the category that should become the dominant mode of commercial filmmaking in the years ahead.

These projects must not only calibrate both production scale and creative direction to their intended demographic, but also shape their creative choices around the characteristics of that audience. In today’s industry, a clear, well-defined audience profile is often more useful than a vague notion of the “general public.”

Recent releases offer telling examples: with its focus on Peking opera, comedy “The Stage” drew most of its box office strength from middle-aged and older viewers; period drama “The Lychee Road” uses Chinese history as an allegory to tell a contemporary workplace story, and thus resonated strongly with white-collar workers; Shanghai-based “Shanghai Wonton” earned more than 90% of its revenue in that city; and “The Last Dance,” which depicts southern China’s Pearl River Delta funeral customs, struck a chord in Guangdong province, Hong Kong, and Macao.

A segmented approach to production must be matched by similarly segmented strategies in distribution and exhibition. Alongside conventional cinemas, the industry should develop specialized venues. Premium theaters equipped with high-end audiovisual systems would be well suited to screening films built around heightened sensory experience. Meanwhile, social cinemas, venues that position themselves as part of a broader entertainment environment and offer diversified consumption options, are particularly appropriate for IP-based films.

Beyond physical speciality theaters, online cinemas are also worth exploring. As a parallel channel to traditional theaters, they could help films directed at a particular audience and art-house productions reach their target viewers more efficiently. Forgoing a theatrical release and premiering online could lower the costs and barriers of film production, encouraging more creators to enter the field.

Although China’s film market faced its share of challenges in 2025, it has also gained an opportunity for meaningful structural renewal. If efforts to improve the quality of film production are paired with a broader embrace of segmented thinking, the industry has every chance of remaining dynamic and resilient in the years to come.

Translator: Dasha Cowley. 

(Header image: Visuals from Douban and VCG, reedited by Sixth Tone)