Beijing approves first new video games in nine months

14,000 small developers reported to have gone out of business during approval hiatus

After a nine month pause, Beijing has finally granted new video game licenses to 45 titles.

The approvals arrived on Monday through China's National Press and Publication Administration (NPPA). The newly approved titles hail from video game makers Lilith Games, Baidu, XD, and Seasun Entertainment – but curiously not Chinese gaming giants NetEase nor Tencent.

China uniquely requires video game publishers to secure regulatory approval ahead of release, and NPPA suddenly ceased granting approvals back in July 2021. Prior to the halt, between 80 and 100 video games were approved monthly. The last batch, released in July, contained 87 titles.

The unannounced halt was unpleasant for publishers like Tencent, that have already established major gaming franchises producing streams of cash at home and abroad, but were denied the chance to launch new games at home. The effect on smaller developers was far worse: around 14,000 reportedly went out of business between July and December 2021.

Beijing has long disapproved of games and gaming, having banned the sale of consoles from 2000 until 2015, required gamers to register to play with their real names – hello, surveillance – and last year labelled games "spiritual opium." Play among minors is restricted to just three hours a week.

It is unclear why Beijing has resumed approving games, but China's government repeatedly declares it wants a healthy tech industry that creates a respectful and civil online environment.

14,000 fewer indie games developers might help with that aim. China's big tech companies, meanwhile, show plenty of signs they know how to play the regulatory game. Tencent CEO Pony Ma even told employees that the company was ordinary and replaceable.

The Chinese web giant has experienced slumping revenue thanks to the slew of regulations, including those imposed on the gaming industry. In Q42021, domestic gaming for the company rose only one per cent year-on-year to ¥29.6 billion ($4.65B) while international gaming grew 34 per cent to ¥13.2 billion ($2.07B).

Gaming stocks rose on news of the NPPA game approvals. The Hang Seng Tech Index jumped by 2.5 per cent – before concerns over rising interest rates and China's strict COVID-19 lockdowns led to a one per cent drop for the day. ®

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