China gaming crackdown: approvals resume but no happy ever after for foreign studios under strict new regulatory regime
- Although some big-name foreign game studios are still waiting for a breakthrough in China, many have already thrown in the towel
- Despite an alluring total size of US$46 billion in revenues in 2021, China’s video games market is no longer an easy game
China has resumed video game licence approvals, but the country’s strict new regulatory environment and content censorship means that the world’s largest gaming market will remain an inhospitable place for foreign developers, according to industry watchers.
Just as Hollywood blockbusters and hot Netflix productions struggle to penetrate China’s market because of censorship issues, foreign game studios are finding it harder to make money from the country’s gamers as regulatory barriers and ideological resistance rises.
Although the National Press and Publication Administration (NPPA) this week reopened approvals for domestic games after a freeze of nearly nine months, the door for imported games remains shut.
The NPPA approved 76 imported games in 2021 before a suspension was announced. But even this was fewer than the 97 approved in 2020 and the 180 approved in 2019. It is still not known whether the regulator will release a list of approved foreign titles for 2022.
“There’s no doubt that both the licensing process and content review are getting stricter, so it’s more difficult for overseas studios to enter the Chinese market,” said Zhang Yi, chief analyst with Guangzhou-based iiMedia Research.