China’s gaming giants Tencent, NetEase miss out on first round of new license approvals by government

Chinese regulators have approved a new batch of video gaming licences that end a months-long suspension on new games, but titles from China’s biggest gaming companies Tencent Holdings and NetEase failed to make the list.

The State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) on Saturday published a list of 80 approved titles on its website, the first since March amid a government restructuring. The nine-month freeze put a damper on the gaming industry and hammered the stock prices of gaming firms like Tencent and NetEase.

The list of newly approved games was dominated by small and medium developers, with no titles from Tencent and NetEase. During its third quarter earnings call Tencent said it had 15 games with monetisation approval in the pipeline.

Tencent and NetEase did not respond to requests for comment on Monday, which was a national holiday on the Chinese mainland.

According to local media reports quoting industry sources, licence approvals tend to be granted in the order they are received so titles from the two companies may still be on a waiting list. All games, whether free or paid, are required to obtain a licence to be published in China, the world’s biggest gaming market.

“Although SME developers dominated the first batch of 80 approved titles, we believe industry forerunners, Tencent and NetEase, which are of higher conformance to strategic directions laid out by the regulatory body, should benefit as the dust settles,” Jefferies equity analyst Karen Chan wrote in a research note.