What happened: Chinese regulators are no longer granting licenses through a process known as the “green channel,” the only official way to get games on the market since the government froze approvals for new games in March. The “green channel” was introduced in August and allowed publishers to run a one-month monetization trial for certain games. The reason behind the freeze is an overhaul of the approval process but it is still unclear when will the overhaul end. Before the gaming approvals halt, China had already had the strictest rules for games’ content in the world.
Why it’s important: China is the largest games market in the world with $38 billion in estimated revenue. Many of the games are still available through the grey market with Chinese gamers now flocking to the Steam platform owned by US company Valve. The biggest loser is Tencent who previously made much of its revenue from gaming. Among other companies affected are NetEase and Bilibili while Japanese game creators are also seeing their shares decline.