China’s licensing freeze seems to be over, with one observer commenting that monthly approvals are now “business as usual.”
CEO and founder of MyGamez, Mikael Leinonen, commented “Monthly domestic game approval release is now business as usual in China. Government is walking the talk to stabilise the regulatory environment and supporting #gameindustry growth,” in reaction to Daisy Zhang’s in-depth breakdown of the latest licences being granted.
Zhang noted that April’s raft of game licences were the first to not feature heavyweights Tencent or Netease, and featured 86 games across a variety of categories including Moonton’s hotly anticipated Mobile Legends: Bang Bang.
Although to the untrained eye it may seem worrying that Tencent and NetEase do not feature on this list, the opposite is very much true. As it shows that, aside from the heavyweight companies one would expect to appear even during a slow period of licensing, that others are now picking up the slack and getting a piece of the action. As we mentioned in our previous coverage, Moonton seems set to go head-to-head with Tencent with the release of Mobile Legends: Bang Bang, especially given Tencent dominates the MOBA genre domestically with their mega-hit, Honor of Kings.
The story so far
The Chinese game industry had already suffered a licensing freeze in 2018 which resulted in an almost nine-month suspension of new game licences. Many foreign games suffered licensing issues due to political circumstances at the time as well. But it was in 2021 that things truly began to look dire as the Chinese government cracked down on what it viewed as the “spiritual opium” of gaming on nearly all platforms. The additional pressure of Covid restrictions only added to the licensing freeze that engulfed the industry.
It was at the end of last year and now into 2023 that the licensing crackdown began to ease. Perhaps driven by a sudden deprecation in the value of the Chinese gaming industry and further economic issues. The lucrative Chinese tech and game industry perhaps necessitated an easing of these restrictions to recover from the turmoil they had previously been facing.
So is it business as usual for China once more? There still needs to be some caution as there’s no written guarantee that regulatory action won’t once more crack down, but a return to the pre-Covid highs of 2018 are – at least in theory – now possible. The sudden wave of new licences offers hope to studios both domestic and foreign that they can once more partake of the verdant Chinese game market, and the revenue which it brings.