China's Freeze on New Games May Continue for Another 4-6 Months
China's gaming industry is in for a long winter, as the ongoing embargo on new game approvals by the Chinese government is now predicted to last another 4-6 months. After a recent list of official "recommendations" were sent to various regulatory bodies in China, which included guidelines such as more stringent approval processes and limiting the number of game licenses, a government insider further reveals that China's gaming industry can expect a drastic overhaul and a much stricter regulatory system when it comes to game approvals in the future.
In the past, new game approvals were handled by two different regulatory bodies, the National Radio and Television Administration and the Ministry of Culture and Tourism. Now the approval process has apparently been delegated to one department, the newly formed State Administration of Press and Publication.
The education ministry document said that the State Administration of Press and Publication, formed in April after being stripped out from SARFT, will “implement controls on the total number of online video games, control the number of new video games operated online, explore an age-appropriate reminder system in line with China’s national conditions, and take measures to limit the amount of time minors [spend playing games]”.
While it seems like the licensing process has been streamlined to one approval body, the insider cautions that "it would be wrong to assume that it will be easier to get approval". The current State Administration of Press and Publication has no appointed leadership as of yet, though it has been speculated that former deputy secretary Liang Yanshun would be taking on the position.
In the meantime, the freeze is expected to last another 4-6 months as a new approval system is in the works, but so far no word on on its progress and there has been no official timeline released. Those who were initially optimistic about the government freeze are now bracing themselves for a big down turn in the gaming industry.
Gao Baowen, an analyst with Shanghai-based Orient Securities, said that if the suspension in licensing continues, the industry will suffer a deeper slowdown. Games publishers usually acquire licences three to sixth months before a product launches, he explained. “In half a year, everyone will run out of stock,” Gao said.
China is one of the biggest and most lucrative markets in gaming, boasting impressive and constantly growing revenue numbers in Esports viewerships and popular franchises such as Arena of Valor. However the government has been less than pleased with the increase in social and health problems related to gaming, with high incidences of gaming addiction prevalent amongst young teenagers in China. If a rise in such incidents continues, I would not be surprised to see the government adopting a zero-tolerance policy towards "degenerate" games in the future.