The Chinese National Press and Publication Administration (NPPA) revealed on its website the list of 67 video games approved by the Chinese government on July 12. This is the third list released since the approval freeze for new titles in July 2021. Tencent and NetEase, two major industry players in Chinawere only allowed to be released in the Chinese market.
Tencent and NetEase, the forgotten ones
For the third time in a row, the NPPA refuses the launch of video game titles produced by Tencent. The technology giant is accompanied, this time, by its competitor NetEase. Together, the two companies dominate the $49 billion Chinese video game market.
If this listing makes some people unhappy, it also makes others happy. The ByteDance juggernaut and the Bilibili streaming platform seem to be the two winners of this new approval. The development studio Nuverse, acquired by ByteDance in April 2021, was able to release its mobile game Crystal of Atlan while Bilibili and developer TiGames released Forged In Shadow Torchan RPG available on computer and Playstation 5.
A sector in crisis in China
Beijing has never been a big fan of video games. The Chinese government has repeatedly harshly regulated the area by attacking the protection of minors. In 2019, their online time was limited to 90 minutes per day on weekdays with a ban from 10 p.m. to 8 a.m. on weekends and holidays. These regulations were subsequently tightened at the end of August 2021 to only 1 hour of play on weekends and public holidays. To enforce these draconian measures, video game players have collaborated with the authorities. This is the case of Tencent, which had introduced a facial recognition system on some of these games.
The crackdown continued last April as the National Radio and Television Administration announced that video games not approved by the Chinese police were broadcast bans. Streaming platforms and social networks have been heavily impacted.
The suspension of the approval of new titles introduced for nine months from July 2021 to April 2022 greatly weakened the industry. If giants like Tencent have been able to get by thanks to different revenue channels, this is not the case for the 14,000 companies in the sector which have been forced to put the key under the door.
Doubts remain about the sustainability of the video game industry in China. In August 2021, theEconomic Information Dailythe official Chinese daily, qualified online games “opium for the mind” and “electronic drug”. Since then, investors have been hesitant. Tencent’s stock has lost nearly 40% of its value in one year, falling from $70.83 to $42.67.