Game approvals in China have failed to recover to levels seen in early 2018 prior to the nine-month regulatory freeze on new titles. Some 1,570 titles received the go-ahead in 2019, bringing the monthly average down to around one-fifth of the comparable figure for the first three months of 2018.
Why it matters: China rolled out stricter requirements for video games in April to reduce the number of titles allowed to monetize and boost the overall quality of products on the market.
Details: The State Administration of Press and Publication (SAPP) approved an average of 131 games per month last year. The monthly average before the licensing freeze, which lasted from March to December 2018, was 641.
- More than half of licenses in 2019 were given in the first three months of the year when the SAPP cleared up a backlog of applications from the suspension.
- Of the 1,570 approvals, 1,385 were for domestic titles and 185 were for overseas publishers, according to industry outlet GameGrape.
- The vast majority (93.1%) of all approved games in 2019 were for mobile.
- Tencent and NetEase received most monetization licenses among all publishers in 2019, with 32 and 31 of their titles approved, respectively.
- The drop has a limited impact on earnings in the market, with overall revenue growing 7.7% year on year to RMB 230.0 billion (around $33.1 billion), according to a report (in Chinese) from China Audio-video and Digital Publishing Association.
- Publishers are still feeling the bite of stricter regulations, however. The number of firms that deregistered and exited the market nearly doubled last year to 18,710, according to a report from The Beijing News
Context: The SAPP, under the jurisdiction of the Communist Party’s propaganda department, replaced the State Administration of Press, Publication, Radio, Film, and Television as the overseer of game approvals in December 2018.
- Game approvals resumed in the same month that the SAPP took on this role, ending the nine-month suspension.
- The SAPP issued a notice in February 2019 requesting local authorities to stop submitting monetization applications due to the heavy backlog.
- In April 2019, the SAPP set higher standards for titles to gain approvals, freezing out those that “lack cultural value” or “blindly imitate others.”