China resumes game licensing approvals, ending an eight-month freeze

China’s gaming regulator on Monday granted publishing licenses to 45 games, signaling an end to an eight-month freeze that has wreaked havoc on the industry.

The National Press and Public Administration published the list on its website. Games from 37 Interactive Entertainment, G-bits, X.D. Network, Yoozoo Network, Lilith, Baidu and other developers got the approval, while titles from gaming giants Tencent and NetEase were not on the list.

The decision has boosted the whole industry that has been highly regulated for months, since it may indicate that authorities may unlock doors for gaming companies. On Monday, shares of 37 Interactive Entertainment finished up 3.66%, tremendously outperforming a 3.67% plunge in the Shenzhen Component Index.

Last July, Chinese officials stopped approving game monetization licenses, forcing numerous of smaller enterprises in the sector out of business. Then, on August 30, authorities introduced new rules that limit the amount of time children can spend on video games to three hours a week, a move it said was necessary to combat gaming addiction. 

According to South China Morning Post, about 14,000 small studios and other gaming-related firms were deregistered from July to December last year.

Although the domestic market has suffered setback, overseas markets are still bringing growth and hope to Chinese game developers.

Affected by the freezing of game licensing and the limitation on video-game playing time, Tencent’s fourth-quarter financial report was dismal, with domestic game income gaining only 1% to 29.6 billion yuan. In contrast, its international gaming revenue rose 34% year over year to $13.2 billion in the quarter. 

According to AppsFlyer, an Israeli mobile marketing analytics company, an increasing number of Chinese gaming developers are targeting overseas markets for growth in 2022, as they are dedicated to developing high-quality games to attract global users.