China gaming approval ‘green channel’ halted after one Communist Party official’s promotion

Inside the Chinese bureaucracy, one unfilled job may be putting a US$38 billion industry on edge.

Chinese regulators have shut down the last known official path for releasing new games amid a broader licensing freeze, publications including Bloomberg and The Wall Street Journal reported this week.

This so-called green channel is a workaround for a few big firms to make money off their new titles after Beijing suspended approval of new games since the end of March.

Its existence was first revealed publicly by Tencent president Martin Lau during a conference call in August. Lau said the special process allowed publishers to apply for games to be distributed and monetised for a month-long testing, acting as a “relief for the entire industry.”
Industry speculation was rife that his comments angered the authorities, who promptly shut down the channel, closing off the last avenue for profit for the burgeoning gaming industry.

But a more mundane reason might be behind the halt in approvals. Niko Partners, a research firm that specialises in the gaming industry, suggested the suspension might be related to a top gaming regulator being promoted and leaving his position in August, the same month that Lau made his comment on the green channel. In the report, the analysts cited games publisher sources for the information.

“Game publishers are now in the same position they were in before the temporary approval process was introduced. [They] will not be able to have new games approved until the SAPP carries out reforms and begins issuing licences again,” Niko wrote in a blog post published on Wednesday, referring to the newly minted State Administration of Press and Publication, which is in charge of game licensing among other things.