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Grand Theft Auto maker calls US-China video game trade unequal

Take-Two CEO calls on the the US government to intervene

Video gaming
This article originally appeared on ABACUS

The boss of Grand Theft Auto is taking aim at what he thinks is unfair treatment by China.

The CEO of Take-Two Interactive, which owns the companies behind huge franchises like GTA, NBA 2K and Red Dead Redemption, called it a “completely odd and unequal situation.”

At a conference call with Goldman Sachs, Strauss Zelnick said, “At the risk of being a little bit political, our government actually does need to take a position with regard to our trade with China.”
This is Take-Two’s NBA 2K Online, a PC version of NBA 2K tailor-made for Chinese gamers. Here you’re seeing a three Kobe playing against three Chinese streetballers -- y’know, normal basketball stuff. (Picture: NBA 2K Online)

Zelnick pointed out that Chinese companies are free to buy American companies and publish their games in the country -- something US companies are unable to do freely in China. “We, in order to go to China, have to have half our business owned by a local company.”

He’s not wrong -- China says that foreign game makers must partner with a local company to access the market.

But it’s also not exclusive to games. It’s also a standard practice in the auto industry. You might see plenty of Volkswagen or General Motors vehicles on the streets of China -- but they’re badged as SAIC Volkswagen or SAIC-GM.

Zelnick’s complaints may have sounded like digs at Tencent, the world’s largest gaming company. After all, it’s bought American companies like Riot Games and published their own games in the US like Arena of Valor.

Arena of Valor, China’s mobile League of Legends, is aiming to be the world’s go-to mobile esport

But Tencent is also Take-Two’s partner in China, so Zelnick was careful to praise the company while also re-affirming his stance.

“We're thrilled to be in business with them,” said Zelnick. “But we don't have a choice, to be clear.”

The Take-Two CEO also claimed the lack of approvals for games is “politically-driven”. While he didn’t elaborate on exactly why, political considerations have shelved games before: Last year, China banned all new games developed in South Korea from launching in the country.
Grand Theft Auto is banned in China, but it still has many underground fans who have made mods that feature Chinese soldiers. (Picture: 3DMGame)

Still, Zelnick is optimistic that China will one day accept Western games without restriction. And the auto industry again might show the way forward.

The country has recently been tweaking its policies to relax ownership restrictions with foreign carmakers, which will allow them to fully own their operations in China -- without sharing the profits with local companies.
Of course, it’s also obvious why Take-Two wants to be in China, despite all the roadblocks. The country has 459 million gamers -- more than the entire population of the US and Japan combined.

A third of China’s population plays mobile games

For more insights into China tech, sign up for our tech newsletters, subscribe to our Inside China Tech podcast, and download the comprehensive 2019 China Internet Report. Also roam China Tech City, an award-winning interactive digital map at our sister site Abacus.