According to Entgroup, a company that tracks film-related data, top film companies have reported lower box-office receipts in China in 2016.
The source noted that some firms have even recorded their lowest profit and revenue growth figures for several years.
Last year, box-office receipts in China only grew 2.4 percent, a huge drop from a whopping 49 percent increase in 2015.
Meanwhile, Huayi Brothers Media, the country's biggest private filmmaking company, announced that its net profit has dropped for the first time since the firm was established eight years ago. Huayi's annual reports showed that its net profit for 2016 went down by 17 percent to $117 million.
"This year we've experienced substantial regression both in our film box office and our market share," Wang Zhonglei, the group's co-founder and chief executive, stated.
Wanda Cinema, on the other hand, tallied a 7.5 percent increase in its annual net profit. The figure was the first time that China's biggest film distributor saw a single-digit yearly increase. It was also the lowest statistic it has obtained since it publicly released net profit data in 2011.
Earlier in February, Alibaba Pictures also warned that its losses last year could amount to $140 million.
Industry insiders argued that the slowdown the Chinese film market has been experiencing can be attributed to slowing economic growth and bad films.
"Ever since 2015, China's film market has become superficial, with vast amounts of capital flooding into the industry, combined with a severe lack of creativity," film producer Hou Zhihui noted, emphasizing that "the audience cannot be fooled."
"The audience became disappointed with many big productions last year and now only genuinely good-quality films can excel at the box office," Hou added.
In line with poor box-office receipts in China, the government is also tracking down the issue of theaters allegedly attempting to under-report ticket sales. Film executives claim that this might have affected around 10 percent to 20 percent of sales.