A significant number of smaller game developers could put themselves up for sale in 2019 due to regulatory changes, leading to greater industry consolidation, according to a research report from equity firm Tonghai Securities.

Developers will probably see a much slower game approval process and lower number of approvals in the rest of 2019, the report says. While 9,000 games were approved in 2017, potentially only around 3,000 will receive monetization approvals in 2019, analyst Esme Pau, who co-authored the report, told TechNode.

This could be the result of an ideology shift within the government, according to Pau. “They disprove of minors spending more time on games, and they think that there should be restrictions on the number of approvals this year.”

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Tony Xu

Tony Xu is Shanghai-based tech reporter. Connect with him via e-mail: tony.xu@technode.com