China gaming crackdown: freeze on new video game licences extends into 2022 as 14,000 gaming-related firms shut down
- Regulators have not released a list of approved new video game titles since the end of July, marking the longest suspension since a nine-month hiatus in 2018
- As a result, about 14,000 small studios and gaming-related firms in China went out of business over the past several months
China’s freeze on new video game licences is extending into 2022, dashing hopes that the process might resume by year-end, which has led many small gaming-related firms to close their operations and prompted the industry’s biggest publisher to pursue expansion overseas.
The National Press and Publication Administration (NPPA), which is in charge of licensing video games in China, has not published a list of approved new titles since the end of July. This marks the country’s longest suspension of new game licences since a nine-month hiatus in 2018 that followed a regulatory reshuffling.
As a result, thousands of small studios and video gaming-related firms – including those involved in merchandising, advertising and publishing – went out of business over the past several months.
About 14,000 of these enterprises have been deregistered since July, according to a report on Friday by state-run newspaper Securities Daily, which cited data from business registry tracking firm Tianyancha. That number signified a considerable acceleration from the 18,000 video gaming firms that shut down throughout 2020.
The new Singapore studio will be TiMi’s fourth overseas developer facility after those in Los Angeles, Seattle and Montreal. Before this move, Tencent had its employees in the city state work only on existing games.
Why does the Chinese government hate video games?
The recent company closures and lay-offs show the increased regulatory uncertainty in China, which ranks as the world’s largest and most lucrative video gaming market. That has made it increasingly difficult for companies to invest and draw up new video gaming projects in the domestic market.
The NPPA has neither provided an official explanation for the latest suspension nor any hint on when the process for new video game approvals will resume. Since May 2019, the NPPA has typically announced newly licensed games either in the middle or at the end of each month. Between 80 to 100 games are usually approved each month.
