China has finally ended a freeze on game approvals as its government approves a number of video games licenses today, as sources have revealed to Bloomberg and Reuters. This ends 263 days of a freeze that has effectively stalled China's video games market, which is one of the biggest in the world.
In China, in order to publish and sell games, companies must register and get license approval from The National Press and Publication Admininstration (NPPA), but since July 2021 this ministry has stopped approving such licenses. Sources familiar with the matter revealed to Bloomberg that the NPPA has given out a list of approved titles to developers, but it is not yet clear if these titles include games from China's biggest companies such as Tencent and NetEase.
However, the news that China was once again approving games sent gaming stocks soaring, with the likes of NetEase surging in value. Among the games to have been awarded licenses in the past week include XD Inc's 'Party Star', as reported by Reuters, and iDreamSky Technology's 'Watch Out For Candles', according to Bloomberg.
According to Niko Partners' senior China analyst Daniel Ahmad, a total of 45 domestic games have been approved. A fuller list of specific titles will be revealed later today, while the news that games are once again getting the publishing go ahead has huge implications for the games industry in China.
Under Xi Jinping's leadership, Beijing has been targeting video games with a tech crackdown and imposing new regulations that restrict minors' access to online games. Censorship has expanded and stringent controls to curb what Beijing sees as gaming "addiction" has increased. But the resumption of gaming approvals is "likely to quell investors", according to Bloomberg, especially those concerned with the prospects of Tencent, which is the largest games company in the world.
The freeze on regulatory approval also occurred in 2018, which lasted a nail-biting 10 months, causing woe to investors and China's burgeoning games industry. Alongside giants such as Tencent and NetEase, there are a growing number of games start-ups in China, all of which were caught in the freeze. China's mobile games sector is particularly massive, but all video games published in the country require a license in order to be sold, giving the NPPA an enormous amount of influence over the sector.
With dozens of games now being approved, this is a welcome sign that the most recent freeze is now thawing, and somewhat normal business can hopefully resume.