War game turf wars need a clear winner

PUBLISHED : Thursday, 05 November, 2009, 12:00am
UPDATED : Thursday, 05 November, 2009, 12:00am

Beijing's demands for tighter censorship of the internet, with online games a particular target, has sparked rivalry among government agencies for control of a sector that promises fast-growing revenue. Now, the latest version of the world's most successful role-playing online game, World of Warcraft, has provided a rare glimpse of a struggle behind the scenes between top bureaucrats for power over internet content.

NetEase.com, which has been licensed to operate the game by US-based publisher Activision Blizzard, has been left in legal limbo because of a feud between the General Administration of Press and Publication (GAPP), and the Ministry of Culture. NetEase launched the game without waiting for GAPP's go-ahead, because it thought approval from the ministry was all that it needed after a change in regulation of the gaming sector.

GAPP, however, insists it is still in charge and has ordered the company to stop recruiting new subscribers and charging existing ones. The ministry yesterday backed the company, saying GAPP had overstepped its authority.

The row reveals the reality that the mainland's bureaucracy, often seen as a monolith, is far more complex than that, with different departments and factions within them competing for power. Wily entrepreneurs have long known this and have skilfully exploited the loopholes which have arisen as a result.

However, when a conflict such as the one which has exploded over World of Warcraft emerges, the results for the companies concerned can be disastrous. The dispute is unlikely to be resolved quickly. As a result, NetEase and Blizzard shares lost ground and analysts are preparing to lower their revenue estimates for both by hundreds of millions of yuan.

For the sake of investor confidence and the ability of companies from the mainland, Hong Kong and elsewhere to make commercial decisions with certainty, the State Council should act and determine once and for all who has the ultimate authority to act as the regulator.




You may also like