China's gaming market is at a tipping point, with about half of all digital gaming revenue coming from mobile games, according to a new report. Ironically, though, the government could slow the growth of mobile gaming with a ban of hottest game of 2016—Pokémon Go.

iResearch Consulting Group found that in 2016 mobile games accounted for more than half of all digital gaming revenue in China, the first time mobile had reached that level. In 2015, mobile made up about 40% of digital gaming revenue.

But authorities in China are banning Pokémon Go as well as similar augmented reality games, citing a variety of concerns ranging from consumer safety to trespassing. Even national security was mentioned as a risk.

Never released in China, Pokémon Go swept much of the rest of the world in 2016. Its uptake was so swift and widespread in the US that it helped shift consumer attitudes about location sharing.

China seems willing to reconsider its ban of AR games at some point in the future, saying that it was blocking the games "for the time being."

Stumbling blocks like that aside, iResearch predicts mobile games will make up an even larger portion of digital gaming revenue in 2017, at 63%.

Mobile games are making up a larger and larger portion of a market once dominated by so-called PC client games—games played natively on a PC, as opposed to being played on a browser. (Until recently, video game consoles faced restrictions in China.) PC-client games made up as much as three-quarters of the gaming market earlier this decade, but their share has declined for five straight years. As recently as 2015, PC client games still made up nearly half of all digital game revenue, but in 2016 the share fell to about one-third.

—Ben Clague