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China is a gigantic market that is expected to generate over $1.2 billion in mobile game revenues in 2013, according to Asian market-analysis firm Niko Partners.

Niko released a report on the Chinese market and found that gamers in that country are swarming to smartphones and leaving behind social and browser-based games. The company expects that Chinese consumers will activate around 500 million smartphones by the end of 2013. That’s a massive increase from 100 million active smartphones in early 2012.

“Mobile games make up the fastest-growing segment in the Chinese games market and have taken market share from PC-based casual and social online gaming,” Niko senior partner Kevin Hause said in a statement. “However, the decline in PC spending has not yet materialized on the mobile side. With 80,000 developers and hundreds of app stores, the market is currently very fragmented, and heavy competition means gamers don’t need to pay for games. We expect to see consolidation in the coming year.”

The intelligence firm claims that nearly 80,000 development studios currently exist in China. Those companies release over 100 new games every day.

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Niko is selling its full report for $4,000 to help demystify the market for Western studios. The company used Umeng and App Annie, a pair of analytics platforms for mobile apps, to conduct its research.

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