Chinese movies flop during this year’s Lunar New Year break
The holiday season ended with a 40 per cent decline, an eight-year low despite the all-time record of four million screenings. Many theatres were left empty, especially in smaller cities, due to high ticket prices, competition from short videos and online series, and a saturation of patriotic productions. Meanwhile in Japan, the country’s movie industry was experiencing an exceptional boom.
Milan (AsiaNews) – Last year was an exceptional year for Japanese cinema. Movie theatres grossed approximately US$ 1.8 billion, almost a third more than the previous year, even surpassing the record set in 2019.
The reason for this is not only the return of audiences to theatres, but also the strength of local production, which alone accounted for more than three quarters of total box office receipts.
The lion's share of sales goes to titles that became true collective events, like Demon Slayer: Infinity Castle Part 1, the first Japanese film to earn more than US$ 1 billion worldwide, Kokuho and the animated film Detective Conan (also known as Case Closed).
The Japanese film industry has benefited from a particularly flexible production system, integrating publishers, merchandising companies, and other media sectors into the supply chain, creating synergies capable of supporting long-lasting franchises and domestic production over foreign production.
This applies to China as well, but with a twist. In China imported films represent about 20 per cent of box office receipts and no Hollywood movie topped US$ 1 billion in 2025, a sign of a structural decline for major US productions among East Asian audiences.
In Japan, concerns about the potential disaffection of older audiences after the pandemic proved unfounded, and moviegoers across all age groups returned to theatres, reaching nearly 190 million admissions.
But while Japan is experiencing a period of confidence, China’s film market is in crisis because of economic fragility, cultural choices, and political interference.
China and the mirage of Ne Zha 2
Last year, the Chinese Lunar New Year season saw all records shattered, with nearly 10 billion yuan in box office receipts and 187 million admissions during the holiday period, driven by a single animated film, Ne Zha 2, which alone accounted for approximately 30 per cent of China's entire annual box office.
This success was amplified by an unprecedented patriotic outcry, with state media promoting the film as a source of national pride, while some private companies went so far as to close their factories to bring employees to the cinema. Viral campaigns on social media presented ticket purchases as a patriotic duty, enabling the film to break every Hollywood record.
Critical voices were censored, and the nationalist press framed the film's success as a sign of Chinese cultural superiority over US productions.
Advance sales for the 2026 Lunar New Year saw, however, a drop of more than 60 per cent, with the festive season closing with the box office grossing 5.68 billion yuan for the entire period, an eight-year low and a 40 per cent decline.
This year's lineup, despite its diverse genres, failed to replicate the Ne Zha 2 phenomenon, and even the record-breaking nine-day holiday season could not compensate for the absence of a major film, with extra days taken up by tourist visits.
Pegasus 3, a comedy set in the world of car racing, led the holiday season with over 50 per cent of the week's box office. Its success, however, appears to be tied to the strength of a proven franchise, lacking the ability to attract new audiences.
The number of screenings hit an all-time high of nearly four million, but theatres remained largely empty, with an average of just 20 filmgoers per screening and an occupancy rate of 15 to 20 per cent.
Confirming the decline in family demand, even Boonie Bears, which had no competition in the children's segment, performed significantly worse than previous years.
The only film bucking the trend was The Swordsman, a wuxia film, i.e. the Chinese martial arts and chivalry. After a weak debut, it experienced a rare recovery in cinemas thanks to positive word of mouth.
The picture is further complicated by a structural problem related to ticket prices, particularly acute in third- and fourth-tier cities, which in the past three years had contributed more than half of the holiday season's revenue.
While the national average ticket price during the Lunar New Year period hovered under 50 yuan, in provincial towns prices reached 80 yuan and more. For an extended family of five, a night at the movies can cost four or five hundred yuan for tickets and drinks, transforming what should be a holiday ritual into a luxury item.
This price difference is explained by the revenue-sharing mechanism between producers, distributors, and cinemas. In small towns, with weaker bargaining power, cinemas accept less advantageous conditions and rely on increased ticket sales during the holiday season to cover fixed costs for the entire year.
Complicating the situation is a minimum reference price used for calculating the revenue to be shared: Even if the ticket is sold for less, theatre owners must still pay distributors the share calculated based on the minimum threshold, with the difference coming out of their pockets.
In this three-way game, raising prices during the holidays becomes the most prudent choice, but it ends up having a counterproductive effect, because it alienates the season's most important audience: families returning home for the holidays.
The Chinese film market is therefore in a phase of profound transition, in which the old model based on the combination of great directors, A-list stars, and privileged release dates no longer serves as a guarantee of success.
Social media and short-form video platforms have drastically limited the impact of word-of-mouth, turning opening day into an immediate testing ground where audience judgment crystallises within hours.
At the same time, the overall entertainment offering has multiplied, with short-form videos, online series, live performances, and other formats fragmenting attention and making going to the cinema a high-cost option rather than the default leisure choice. The result is a progressive loss of regular filmgoers, with over half of audiences seeing only one film in the entire year in 2025.
Cinema and propaganda, an ever-closer connection
Added to this is a growing saturation of patriotic productions, which younger audiences perceive as repetitive and predictable. This trend was further accentuated this year by Zhang Yimou's thriller Scare Out, the first film produced under the direct supervision of the Ministry of State Security.
With agents present on the set and a screenplay clearly inspired by real-life espionage cases, the film entered the holiday schedule as the top in an increasingly national security-focused offering.
China's annual box office in 2025 had shown signs of recovery, with a 22 per cent growth, but numbers remain significantly below pre-pandemic levels in 2019. The authorities' response is significant in its scope and what it reveals.
This year has been proclaimed the 2026 Film Economy Promotion Year, and a consortium of public institutions, banks, and digital platforms announced subsidies totalling at least 1.2 billion yuan. This is in addition to initiatives by individual provinces in the form of cinema vouchers and tourism discounts for filming locations.
This large-scale intervention suggests that, for the authorities, the crisis of the film industry crisis is part of a broader problem, linked to the fragility of consumption and the need to revive household spending, but also to the role the big screen plays as a tool for national cohesion and the dissemination of the narratives promoted by the regime.
.png)
