bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

quizIds

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

paywallTypes

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Josh Ye

This article originally appeared on ABACUS
There are more gamers in China than anywhere else. But since March, those gamers have had a little bit of a problem: The government hasn’t approved any new games for sale.
The reason is allegedly a bureaucratic matter, as the reorganization of departments causing a mess that has backed up approvals vital in a country that loves regulation.
Now, that doesn’t necessarily mean there haven’t been new games available. Some games got their approval before the freeze; others slipped through, but without any monetization options.
But as the freeze drags on (and on, and on) with no end in sight, how are companies planning to deal with it -- and how will gamers get new titles to play?
TENCENT
As the world’s largest gaming company by revenue, responsible for games like Arena of Valor and PUBG Mobile, the Shenzhen-based company is obviously affected by the freeze.
Arena of Valor, China’s mobile League of Legends, is aiming to be the world’s go-to mobile esport    
Tencent reported quarterly earnings just a few days ago, revealing that gaming revenue is down 4% -- primarily due to a 15% plunge in PC gaming revenue.
You’d think that, like everywhere else in the world, having the Chinese license for Fortnite would be the money tree for Tencent to lean on. But Fortnite didn’t take off in China the same way it did in the West. In its third quarter report, Tencent didn’t even mention Fortnite.

As for smartphone revenue, that actually rose in the last quarter -- thanks to good planning from Tencent. Niko Partners’ Daniel Ahmad said the company actually had a number of games that were approved prior to the March 28th cut-off date when game approvals stopped.
“Tencent has been able to spread these releases through the year in order to drive growth in its smartphone games segment. Many of these new titles have found success this year, debuting in the iOS top 10,” Ahmad said.
In fact, Tencent still managed to roll out 10 mobile games this quarter. The company told investors that it currently still has 15 unreleased games in development that have already received monetization approval.
But Ahmad said Tencent is still in a very tough situation because the company has more than 40 games in its pipeline but only 15 have been approved.
What if the approval freezes continues after those 15 games are published? Ahmad said Tencent will then have to buy approved titles from other companies and distribute these games itself.
According to the South China Morning Post, there is a grey market for placeholder licenses. They were purchased by gaming companies prior to the licensing freeze, only to resell them later. Each shell license could cost as much as six figures as of this September.
NETEASE
Remember NetEase? The company that Blizzard is tapping to make the mobile version of Diablo? Compared with Tencent, the China’s second largest gaming company reported a much rosier third quarter, with a 27% increase in gaming revenue.
Meet NetEase, China’s second-largest game publisher    
How is that happening? Because NetEase is focusing on their efforts outside of China.
Its CEO Ding Lei said, “Our international expansion, took another leap forward this quarter, contributing more than 10 percent of total online game net revenues for the first time in our company's history.”
NetEase’s games are particularly prominent in Asian countries. For example, its battle royale game Knives Out earned US$274 million from Japan in less than one year, repeatedly ranking as the country’s most downloaded game for months.
In the last quarter alone, the PUBG clone pulled in US$135 million, which makes it 13th among all apps for performance.

In response to this, NetEase’s CFO Charles Yang told investors, “Out of the three largest online games markets in the world, we now have reached critical acclaim in two: China and Japan. The United States market is a next frontier for NetEase.”
He then added that the company sees the opportunity to develop Diablo Immortal as a huge opportunity to show Western gamers what NetEase can do.
WESTERN PUBLISHERS
Of course, Chinese companies aren’t the only ones selling their games in China.
Take-Two told GamesIndustry.biz that they already have approval for NBA 2K, so they’re not worried about that -- a message echoed by EA, which already has FIFA approved for sale. And Ubisoft pointed to the impact of a game already on sale, Rainbow Six: Siege, as continuing to provide plenty of revenue for the company.
None said they were too worried, and suggested the problem will sort itself out sooner rather than later.
But it still remains to be seen how long the freeze will go on for… and when gamers can finally enjoy an uninterrupted stream of games.
We played the Chinese game that fans allege Diablo Immortal is based on    
 

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.



Hong Kong stocks rise for third day as China’s services PMI beats expectations

ByteDance-owned Douyin users in Hong Kong swell to 40% of city’s population, report says

US venture capital firms visit China to study its AI scene as DeepSeek rekindles interest

Hong Kong stocks near 2-month high on strong US jobs data, hopes of trade deal

Tencent Holdings

Game makers not worried by China’s freeze on approving new games

Horror multiplayer Identity V is also another NetEase’s high-performing title, topping iOS downloads chart in Japan for 18 consecutive days. (Picture: NetEase)

Abacus

Tech

Games

Big Tech

Tencent has a stock of pre-approved games to buffer the impact and NetEase will focus on growing overseas
