On Monday, China resumed issuing new gaming licenses (in Chinese) after pausing it for eight months when the country began a broad crackdown on content, gaming, and the education sector last summer.
Why it matters: The halt on new gaming licenses led to an 8-month-long winter for the gaming industry in China, forcing many game makers to downsize, cutting down on development projects, and laying off staff.
- Small studios took the heaviest hit during the license freeze. About 14,000 small gaming companies and gaming-related firms reportedly went out of business by the end of 2021, according to the South China Morning Post.
Details: On Monday, China’s National Press and Publication Administration (NPPA) released a list of licensed games for April, made up of 45 Chinese games. It’s the first list of licensed games released by the administration since last July, with new licenses put on hold since August.
- Major Chinese gaming companies like 37 Interactive, Lilith, and Baidu were all granted new licenses this month. However, the country’s two largest gaming companies, Tencent and NetEase, were absent from the list.
- 89% of the approved games are made for mobile platforms, while 9% are for desktop devices. The list of newly licensed games also includes one indie title for the Nintendo Switch, called “Clocker.” The game was initially released on the desktop gaming platform Steam and received a favorable rating of 84%.
- The list of newly licensed games does not include any overseas games, which have become increasingly attractive for Chinese players as they face tighter regulations at home.
Context: China has strict rules for publications, which apply to video games. Companies must apply to NPPA for gaming licenses to publish new games. In the seven months of 2021, before the freeze, China issued 675 gaming licenses, averaging 96 per month.
- Chinese authorities had initiated long periods of gaming license freeze in the past. In late 2018, the gaming industry saw 80 new licenses approved after a 9-month hiatus.
- In addition, stricter rules for Chinese gaming companies at home pushed NetEase, Tencent, and others to focus more on developing games for the overseas market.