The video game licensing freeze in China lasts until 2022, and dashing hopes the process can be restarted in late 2021, prompting many small gaming – related companies to close their operations and expand the largest editorial sector. encouragement to seek expansion abroad. The National Press and Publications Administration (NPPA), which is in charge of licensing video games in China, has not released a list of new titles approved since the end of July. This is the longest suspension in the country of new gaming licenses from a nine – month hiatus in 2018 that followed a regulatory shake – up.
As a result, thousands of small video game-related studios and companies (including those dedicated to merchandising, advertising, and publishing) have gone out of business in recent months. About 14,000 of these companies have been decommissioned since July, according to a report published by state-owned newspaper Securities Daily, citing data from Tianyancha business record-keeping company. This figure is a significant acceleration compared to the 18,000 video game companies that closed during 2020.
Larger companies, such as ByteDance, which owns TikTok, the online search giant Baidu, and Tanwan Games, cut their losses by laying out a number of employees related to the video segment of their operations. Meanwhile, the industry leaders, Tencent Holdings and NetEase are directing more resources to foreign markets. Tencent, based in Shenzhen, runs the world's largest video game business by revenue and the ubiquitous Super WeChat app, it is planned to open a new game development studio in Singapore under the subsidiary of TiMi Studio Group. TiMi is the developer behind two of Tencent's biggest mobile game hits, Honor of kings Y. Call of Duty: Mobile.
The new studio in Singapore will be TiMi ‘s fourth overseas development center, after those in Los Angeles, Seattle and Montreal. Prior to this move, his employees in the city were working on Tencent's existing video games. Recent company closures and layoffs highlight growing regulatory uncertainty in China, which is the largest and most profitable video game market in the world. Because of this it is becoming increasingly difficult for companies to invest and develop new video game projects in the national market.
The NPPA has not given an official explanation of the latest suspension or any hints as to when the approval process for new video games will resume. From May 2019, the NPPA typically announces new licensed games mid or late each month. Usually between 80 and 100 games are allowed each month. The freeze on the new licenses came months after President Xi Jinping raised the issue of gambling addiction among the country's youth during the Chinese People's Political Consultative Conference, the other half of China's annual “two-session” event in March. The other important measure, the restriction of three hours a week for minors to play, was announced in August.
Fountain: South China Morning Post
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