The world’s largest gaming market is experiencing a bureaucratic blockade that is preventing the launch of many new games. China’s government hasn’t approved any new licenses for video games since March, and this means publishers won’t have permission to release games into the market until the proper authorities begin issuing those permits once again. That could take as long as six months, according to a report from the South China Morning Post news site. But Niko Partners analyst Lisa Cosmas Hanson, who closely tracks China, says that the country could open the gates much sooner than a half-year from now.
“The newly created regulatory agencies have six more months to finish their reorganization, after which there would be no reason for further delay,” said Hanson. “It might not take six months; in fact, [at Niko] we doubt it will.”
China is on pace to generate nearly $38 billion in games-related revenue in 2018, according to research firm Newzoo. That’s significantly more than the $32.7 billion of all three countries in North America, and this is why so many game companies are worried about this delay in China.
China stopped issuing new licenses due to the restructuring of its government. The State Administration of Press, Publication, Radio, Film, and Television and the Ministry of Culture previously oversaw the process to approve games for sale in China. But now those groups are splintering or merging with other ministries, and they are taking on new leadership. The Ministry of Culture is now the Ministry of Culture and Tourism. The other new agency is the State Administration of Press and Publication.
But it’s not as easy as going to those agencies to ask for a permit to sell a game. They haven’t established their new processes for issuing those approvals, and these organizations have not had permanent department heads in place for long.
“There’s already been changeover in leadership in the past few months in the new agencies,” said Hanson.
But now that the groups have a deadline to get things figured out, Hanson thinks that they shouldn’t need long to begin stamping approvals on games once again.
“Meanwhile, gamers are still avid, and games are still hot,” she said. “Of course it is troubling to not get new licenses for games that have been paid for, licensed, or developed, but revenue will continue to roll in for existing games. But everyone hopes that this delay in licensing will be rectified soon — much sooner than six months.”
Until then, China has created some relief. It has introduced a new testing period where games can go on the market for one month by getting a less stringent commercial-testing approval. It’s not exactly the free market, but it’ll have to do for now for anyone who wants access to the world’s biggest audience of gaming consumers.