China makes no secret of the fact that it wants to fundamentally reduce the video game business there. Last year, it issued a series of controversial laws that allow young people to play video games for only a few hours a week. At the same time, the state carefully checks which titles are available and which are not. According to the South China Morning Post (SCMP), the situation has now gone so far that no studio has been licensed to sell the new game for six months – the state regulator has simply stopped publishing it.
This is an office called the National Administration of Press and Publications in China (NPPA), which monitors and regulates the country’s gaming industry. In order for a developer to launch a new title on the Chinese market, the NPPA will first check if the video game is compliant, that it will not spoil the morale of young people, according to local rules, and then the company will grant a license to distribute the title.
The process had been at least slightly dubious in the past, with the NPPA choosing a lot about what to license and what not, but a few video games always went through the network. The problem now is that luck has stopped smiling at this limited number of developers, no one in the country has obtained a new license since July last year.
Game studios themselves do not understand what is happening, but the absence of licenses means an existential threat to them. According to the SCMP, many developers are on the verge of bankruptcy or have already gone bankrupt (even up to 14,000 companies), other larger companies are considering moving abroad. This applies to Tencent, for example, and China’s TikToku headquarters has started firing employees of its gaming division.
The authority itself, as is customary in China, did not explain why it suddenly stopped issuing licenses, but it is generally assumed that this is a continuation of the nationwide crackdown on playing video games. As a reminder, as of last August, young Chinese can only spend three hours a week playing select games. The new rules follow a statement by President Xi Jinping, who at last year’s Congress of the Chinese Communist Party identified the alleged dependence of young people on video games among the country’s serious problems.