What just happened? China’s months-long pause on granting video game licenses has ended after it approved XD Inc title ‘Party Star’ on April 8. The country’s regulators had not handed over a game monetization license since July last year, just before China restricted the amount of time under-18s are allowed to play games to just one hour on Fridays, weekends, and holidays.
A document seen by Reuters shows that Party Star was granted the ISBN license required by China for developers to publish games on the mainland. It is reportedly one of a batch of titles that have received the licenses. The National Press and Publication Administration (NPPA) has distributed a list of approved games to developers, and it plans to publish the names on the agency’s website soon.
Bloomberg reports that other games on the list include Watch Out For Candles by Shenzhen developer iDreamSky Technology Holdings Ltd. It wasn’t clear if titles from Tencent Holdings Ltd. and NetEase Inc., the country’s two biggest gaming corporations, were included, but the latter’s share price rose 8% on the back of the news.
Granting the license marks the end of what had become China’s longest-ever freeze on approving games. It lasted longer than the nine months authorities went without green-lighting any titles in 2018, which was the result of an overhaul of regulatory bodies.
Despite its government’s disdain for gaming—a 14-year ban on consoles was only lifted in 2015—China has the largest gaming market by revenue ($41 billion in 2020) and the most mobile gamers (655 million in 2021).
China has seen officials cracking down on the tech industry as a whole in recent times, especially gaming, which it called “spiritual opium.” Minors could only play online games for one and a half hours on weekdays and three hours on holidays and weekends before even stricter time limits were imposed. Gaming firms promised to adhere to the rules, but the threat of further regulation plummeted Tencent and NetEase share prices.
It’s not just gaming China has been clamping down on. There are concerns that it will start tightening regulations around its $30 billion streaming industry, including limiting the amount of money content creators can earn.