Nearly 14,000 videogame companies have stopped operating in China before the new laws

Nearly 14,000 videogame companies have stopped operating in China before the new laws

The freezing of videogame licenses in China extends up to 2022, fading the hopes that the process can be resumed at the end of 2021, which has led many small businesses related to games to close their operations and has driven the greatest Editorial of the sector to look for expansion abroad. The National Press and Publications Administration (NPPA), in charge of the granting of video game licenses in China, has not published a list of new titles approved since the end of July. This marks the longest suspension of the country of new games licenses from a nine-month-old parenthesis in 2018 that followed a regulatory remodeling.

Nearly 14,000 videogame companies have stopped operating in China before the new laws

As a result, thousands of small studies and companies related to videogames (including those engaged in merchandising, advertising and publication) stopped operating in recent months. About 14,000 of these companies have been lowered since July, according to a report published by the state newspaper Securities Daily, which cited data from the Tiananancha business records tracking company. This figure is a considerable acceleration with respect to the 18,000 videogame companies that closed over 2020.

Larger companies, such as Bytedance, owner of Tiktok, the giant of Baidu online searches and Tanwan Games, trimmed their losses by dismissing several employees related to the video game segment of their operations. Meanwhile, the industry leaders, Tencent Holdings and Netease, are allocating more resources to foreign markets. Tencent, based in Shenzhen, who runs the largest video game business in the world for income and the omnipresent WeChat Sugreeplication, plans to open a new video game development study in Singapore under the subsidiary Timi Studio Group. Timi is the developer who is behind two of Tencent's greatest successes in mobile games, Honour of Kings and Call of Duty: Mobile.

Singapore's new study will be the fourth Timi Development Center abroad, after those of Los Angeles, Seattle and Montreal. Before this transfer, Tencent had its employees in the city state working only on existing video games. The recent closures and layoffs of companies reveal the growing regulatory uncertainty in China, which is the largest and most lucrative videogame market in the world. This has made companies increasingly difficult to invest and develop new videogame projects in the national market.

The NPPA has not provided an official explanation for the last suspension or any clue on when the approval process of new video games will be resumed. Since May 2019, the NPPA tends to announce the new licensed games in the middle or end of each month. Between 80 and 100 games are usually approved every month. The freezing of new licenses occurred months after President Xi Jinping raised the issue of addiction to games among young people in the country during the Chinese People's Advisory Conference, the other half of the annual event of the "two sessions "From China in March. The other important measure, the restriction of three weekly hours of play for minors, was announced in August.

Source: South China Morning Post

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