Nexon Stock Drops 7% Following China's Ban On The Release Of Games Made In South Korea

It's sometimes easy to forget that the virtual worlds that we explore are often heavily influenced by the real world. PocketGamer.biz is reporting that the Chinese government recently put a ban on releasing games made in South Korea in China and its effect on the games industry was felt almost immediately. According to Nikkei, a Japanese business newspaper, Nexon's shares dropped a full 7% due to the new ban. The reason for this is that a staggering 40% of Nexon's revenues come from its business in China, which is largely due to the success of Dungeon Fighter Online in the country.

The ban may also hit Netmarble fairly hard, as the company is currently in the process of localizing Lineage 2: Revolution for the Chinese market. As the game is not yet licensed in China, Netmarble may not be able to release the game in China at all unless the ban gets repealed.

Furthermore, for those that are unaware, it is noted that, in order to release your game in China, your game has to be approved for release a full 20 days before its launch and there are "stringent" guidelines that you are required to follow.

While it is as-yet unconfirmed, it is currently being speculated that China implemented the ban on South Korean games as a response to South Korea's new THAAD missile defense system, which the United States is helping the country build in order to defend against "perceived threats by countries such as North Korea." However, China sees the missile defense system as a threat to its security.

It should be noted that games that already have licenses are currently unaffected, regardless of whether they have been released. That being said, Niko Partners analyst Daniel Ahmad seems to think that it is a distinct possibility, having said the following in a statement made to PocketGamer.biz: "It is unclear at this time how long this ban will last and whether already approved games will have their licenses revoked."