Advertisement
NetEase
TechPolicy

Exclusive | NetEase said to scale down some game projects amid Beijing’s crackdown on video gaming sector

  • Dozens of employees at NetEase’s Shanghai and Hangzhou offices are said to have been taken off their original jobs and told to look for new assignments
  • The company’s downsizing of some studios and projects started in early September amid regulators’ increased scrutiny on the video game sector

Reading Time:2 minutes
Why you can trust SCMP
1
NetEase is said to have made operational adjustments to its video gaming business amid Chinese regulators’ increased scrutiny on the games sector. Photo: Shutterstock
Tracy Qu
NetEase, China’s second-biggest publisher of video games for smartphones and personal computers, has downsized some of its studios and projects since early September amid the government’s heightened scrutiny over the sector, according to people with direct knowledge of the matter.

Dozens of employees, including programmers, designers and creative artists at the company’s Shanghai and Hangzhou offices, had been taken off their original jobs and told to look for new assignments inside and outside NetEase, according to one person who declined to be named for discussing a confidential matter. No employee has officially been retrenched.

Like other major video game publishers, Nasdaq and Hong Kong-listed NetEase has multiple studios simultaneously working on different game projects, allowing them to compete against each other for approvals and the final path to market.

Multiple projects, which usually shortens development time for new games, may no longer work in China. Government regulators recently decided to slow the approval process for new games in line with efforts to reduce gaming addiction among minors, the South China Morning Post reported last week. Between 80 to 100 games are usually approved each month by the National Press and Publication Administration (NPPA).

01:09

China reportedly slows down online game approvals as crackdown on video game addiction continues

China reportedly slows down online game approvals as crackdown on video game addiction continues
That move followed a new rule issued by the NPPA, China’s top watchdog for gaming and other forms of online media, that limits gaming time for players aged under 18 to between 8pm and 9pm only on Fridays, Saturdays, Sundays and statutory holidays.

“Gaming companies will take a much more conservative approach to running their business,” said Mark Tanner, managing director at Shanghai-based marketing and research firm China Skinny. “With the new regulations, and narrower opportunities to earn revenue, companies will be less likely to take risks than before.”

Advertisement