Chinese regulators have resumed approvals for new video game licenses for the first time in nine months, ending a government crackdown on the world’s largest gaming market.
The decision to suspend licenses for new games comes after Chinese state media branded online games “mental opium” and added that they have a negative impact on the health of minors — which led to new regulations restricting children to three hours of gaming per week.
Tencent and NetEase lost more than $60 billion combined in market value in September 2021 after Chinese regulators informed gaming companies that the country planned to delay approvals for all new online games. The two companies took another step back after the National Press and Publication Administration unveiled its list of 45 domestic titles that have been approved for new licenses, excluding both industry leaders.
- Of the 45 titles, five are for PC, one for the Nintendo Switch, and the rest are mobile.
- The titles are primarily casual games with lower player spending.
China-based gaming companies were immediately impacted by the new approvals. On Monday, Bilibili Inc. gained 7.2% in U.S. trading, while DouYu International Holdings jumped 2.4%
More to Come
China is expected to approve additional new game licenses. More titles than expected could also launch in the second half of the year. Between 500 and 700 games are projected to receive approval in 2022, according to Niko Partners senior analyst Daniel Ahmad.
