Caixin
Apr 22, 2019 08:01 PM
BUSINESS & TECH

Exclusive: Thousands of Video Games Forced to Re-Apply for Approval

Gamers play online games at an internet cafe in Yantai, East China's Shandong province on Dec. 17. Photo: IC
Gamers play online games at an internet cafe in Yantai, East China's Shandong province on Dec. 17. Photo: IC

Thousands of video games that have been queued up for government approval — some for more than a year — will be forced to go through the approval process all over again, Caixin understands.

They could be waiting beyond October for their games to hit the market.

Gaming companies have been told to submit additional material, including a demonstration video showing their titles include an “anti-addition mechanism,” after the General Administration of Press and Publications (GAPP) issued new guidelines (link in Chinese) on Friday. Other new requirements include publisher profile information and copyright documents.

“Games that have already started the approval process now have to re-apply based on the new regulations,” said an industry source who asked not to be named to avoid repercussions.

The source claimed the regulator had changed the rules to more quickly clear the backlog — given some of game-makers would be unable to reapply.

“This is a way to filter more games … many companies which submitted games for approval went bankrupt in the process and others have submitted games which will never be approved under the new regulations,” the source said.

In December, Chinese regulators ended their freeze on new games approvals, months after authorities stopped approving licenses for new game releases in March that year. At the time, a group of just 80 games were approved for release, most of which were from small and midsize companies.

By February, between 4,000 and 5,000 titles were still waiting for approval, and only 1,000 have been approved since December’s policy change, according to another industry source.

If every one of those titles is forced to re-apply it will take regulators at least until October to clear them, and probably much longer, the source said.

China’s gaming industry is the world’s largest with more than 620 million players, almost double the entire population of the U.S.

But amid the regulatory freeze, the market saw revenues grow only 5.3% in 2018, a slump compared with its 23% expansion in 2017, according to a report by industry tracker Gamma Data and the Chinese Game Publishers Association Publications Committee.

Two of the country’s largest gaming companies are tech giants Tencent Holdings Ltd. and NetEase Inc.

This story has been corrected to state that it is thousands of video game titles that will have to go through the regulatory approval process again.

Yang Ge contributed to this story.

Contact reporter Mo Yelin (yelinmo@caixin.com)

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