China’s video game regulator has announced no new titles approved for sale on the mainland for May, dashing hopes that the 45-game list released in April signals greater regulatory leniency after an eight-month licensing freeze. .
The National Press and Publication Administration, the authority responsible for video game licensing, has generally released a list of newly approved titles every month, except for a two-month licensing freeze since 2018. from the list in May is more visible since the industry applauded the end of the previous month’s licensing freeze.
Now the industry fears that Beijing intends to revert to the way it handled video games before launching its latest crackdown last summer. Even April’s list consisted mostly of titles from smaller companies, and it didn’t come close to the size of a typical pre-freeze list, which might have held 100 titles.
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The suspension from July 2021 to April 2022 resulted in the closure of at least 14,000 small studios. Other studios, including those of gaming giants Tencent Holdings and NetEase, have focused on overseas markets.
Longtu Game, a Beijing-based mobile game developer with more than 600 employees, told the South China Morning Post that it plans to release more games for a global audience after previously focusing primarily on the continental market.
In his latest earnings call, NetEase founder and CEO William Ding Lei said he hopes the overseas market will eventually account for 40-50% of the company’s revenue. The current proportion is just over 10%, he said.
“We have internal targets to have the appropriate proportion for domestic and overseas markets in terms of profit structure and number of games over the next three to four years,” Ding said. The operator of China’s second-largest video game company recently announced its first US-based studio in Texas.
The difficulty of getting new games approved in a maturing market has made China a hostile environment for game companies. The licensing freeze also came with a tough new limit on players under the age of 18, who since last September have only been legally allowed to play on Fridays, Saturdays, Sundays and public holidays, from 8 p.m. to 9 p.m.
Even though big business has weathered the storm better, the crackdown has left a dent. Tencent, which operates the world’s largest video game company by revenue, said its domestic game revenue fell 1% in the first quarter from a year earlier.
“The Chinese gaming industry is going through a process of fierce natural selection,” said Liao Xuhua, principal analyst at Beijing-based Analysys. “In the future, many companies that we are used to will lose mainstream attention, but there will also be companies that will become more profitable. »
Shanghai-based Senligames, a studio that pivoted in December to create metaverse-related tech in part because of the licensing freeze, has not been successful in its transition, CEO Ding Jiaqing said.
“Our transition has been interrupted by the Covid-19 outbreak, which has caused a huge loss,” he said, referring to ongoing disruptions in Shanghai, which have instituted a nationwide lockdown. town in April. “It may seem like gaming isn’t affected, but work-from-home productivity is very low.”
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice journal on China and Asia for over a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
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