Is China really going to slow down the gaming approvals? We think no

14.09.2021

You might have seen the recent news about China slowing down new game approvals. Just to be clear: There is no official announcement on this and with a high likelihood, this is just a groundless rumour.

South-China Morning Post’s yesterday article (https://lnkd.in/eEDfEFT2) claimed that the Chinese game industry regulatory body had suspended (later changed to “slowing down”) new game approvals. According to the article, this information was revealed in the meeting (later changed to have “emerged after the meeting”) between the regulator and two of the country’s gaming giants Tencent and NetEase. The article quickly sent shockwaves through the gaming investor community, causing several Chinese game companies stock prices fall.

The news was quickly rejected by a leading Mainland Chinese game media outlet GameLook article (https://lnkd.in/ghKVwZNp), citing NetEase CEO Ding Lei to call it “fake news” in his message to his employees. Ding later shared the SCMP news article on social media with a comment “fake news” in Chinese. At the same time, the Mainland Chinese media did not mention anything about ISBN approvals suspension or slow down while reporting the regulator’s meeting with the gaming giants.

Regulation related rumours are quite commonplace in the Chinese game industry and the regulator sometimes does intentionally leak information it doesn’t want to formally announce. However, we think it would be highly unusual for the PRC regulators to offer such exclusive information to a Hong Kong-based media outlet, instead of the PRC state-affiliated media. (Despite SCMP generally doing a very good job covering China tech and gaming space.)

There is a recent delay in new game approvals though, as the September “Q3 batch” of approvals was postponed to November due to the implementation of the newly introduced tightened anti-addiction measures for under-aged players. This is business as usual and the purpose of this delay is to give publishers time to implement the new game time restrictions before the games are approved. This is no shocking news and has been communicated to publishers (like us) by the government ISBN agencies. We further checked with several ISBN agencies on the SCMP news and got reassured that no further slow-down is expected.

So we would recommend everyone to keep calm and treat this piece of news as a mere rumour based on misunderstanding until there is some firm information from a source close to the regulator!

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