China’s biggest game company is cutting ads because the country isn’t approving new games

Tencent hasn’t made any money from PUBG Mobile players in China… because it’s not allowed to

Video gaming

Karen Chiu

Published: 6:02pm, 8 Nov, 2018

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This article originally appeared on ABACUS

Tencent’s gaming unit has seen better days.

The tech giant is culling marketing spending for various games amid a freeze in licensing approvals, according to reports from Bloomberg and Reuters.

The measures reflect the difficulties faced by China’s biggest gaming company, after authorities blocked all official approval channels for new games. A recent Tencent internal memo asks marketing executives to tighten their budget to “endure the hard times together”, reports Bloomberg.

Tencent, China’s social and entertainment giant

According to the report, underperforming games, as well as titles that haven’t received the green light from regulators, will need to return any unused marketing budget.

Government red tape this year has hampered Tencent’s efforts to monetize both old and new games. PUBG Mobile, which counts China as its single biggest market, hasn’t made any money from players in the country because it hasn’t been approved to sell in-game items. It’s a similar situation with Fortnite on PC, a global hit that the company had banked on for a windfall.

PUBG, the battle royale pioneer

The halt in licensing, which began in around March, is believed to have stemmed from a government shakeup. The head of the State Administration of Press and Publication, in charge of game approvals, left in August for a promotion -- leaving the post vacant since.

A government source told the South China Morning Post the freeze is expected to last well into early next year.

You’ll need to prove your age to play a Tencent game in China next year

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