Politics, censorship, territory disputes, and gaming? These aren’t usually found in the same arenas. Gaming has become a $130 billion dollar market with political implications — and Chinese censorship is leading the way.

PlayerUnknown’s Battlegrounds (PUBG) is massively successful, and it’s a top seller on the App Store. It’s from South Korean video game company Bluehole, if you were to play PUBG on mobile today, you’d find that “Taiwan” is censored in all the text chats. That word, when sent into chat, is displayed in all asterisks. This will happen no matter what country you are playing from.

You may have seen in recent news that a similar agenda occurred when Beijing, one of the largest markets for air travel, threatened sanctions against American airline companies such as American Airlines, Delta, and United, to change how they refer to Taiwan. It resulted in those airlines folding and removing “Taiwan” from listings to include abbreviations like “TW” or listing “Taipei” — the capital of Taiwan — as destinations.

How did this come to be?

The dispute arises from the One China Policy, which recognizes Taiwan (Republic of China) as part of China (People’s Republic of China) even as Taiwan has been democratically governed, outside Communist China’s control, since the Chinese Civil War ended in 1949.

The Republic of China was a member of the United Nations during the organizations formation and still ruled all of China in 1945. During the civil war in 1949, the Republic of China, was expelled from mainland China to Taiwan, but still claimed sovereignty to mainland China. The original motive for western powers to advocate Taiwan in the United Nations was to deter a communist party from gaining a position in the security council, but mainland China eventually gained enough international support from the General Assembly to win as the rightful representative of China. In 1971, the Republic of China (Taiwan), was voted out of it’s seat by the United Nations General Assembly and the People’s Republic of China (China) would be recognized as the only legitimate Chinese government.

In 1979, the U.S.-PRC Joint Communique would establish diplomatic relations with the People’s Republic of China, which included officially recognizing Taiwan as part of China. That same year, the U.S. Congress enacted the Taiwan Relations Act, which defined non-diplomatic relations between the U.S. and Taiwan. Taiwan is a major non-NATO ally and, an estimated half of all Taiwanese emigrants live in the United States. While many other leading countries still do not recognize Taiwan as its own sovereign government, Taiwan-U.S. relations have been strengthened by the enactment of the 2018 Taiwan Travel Act with stronger official ties for political and socioeconomic gains.

Second, China has a stronghold on censorship and approval for games, which is governed by the State Administration of Radio and Television (SART). This body has recently begun restructuring, halting the issuances of game licenses, to deploy a stricter policy on publication of games within the country. This has impacted the games market in China significantly for companies like Tencent Holdings Ltd., the largest mobile game provider in the world, which owns a 1.5 percent stake in Bluehole and has the licensing rights to publish PUBG in China.

China’s regulatory bodies have already had a major effect on the game industry just this year. Tencent’s stock plunged nearly 30 percent in 2018, wiping out more than $160 billion in market value because of a freeze on issued licenses and regulatory enforcement. With China as one of the largest consumers of games, the power of its regulatory practices will impact the global games market and influence how games are presented to consumers, as seen in the censorship case of “Taiwan” in PUBG.

China’s Ministry of Culture implemented a software censorship decree in 2003 for gaming products; the provision ruling over censorship of Taiwan falls within the scope of “endangering the unity of the nation, sovereignty or territorial integrity.” With China and the U.S. accounting for millions of users for these games, current and future publishers will need to follow the rules to capture China’s half of the market or lose out on profits.

Censorship as industry standard

Censorship, at its core, is suppression or an act of limitation. In a free market for gaming, the destructive financial impact of limiting access of consumers to games can be priced from the market value and revenue loss of leading game-producing technology giants. New regulation will add to the quandary, with China recently enacting the limitation of play time for underage players; Less time for interaction, will lead to less engagement metrics, spiraling towards the bottom line. This trend will persist as China postures to regulate the industry heavily for the long run.

China has a monstrous community engaged in gaming with over 600 million players and growing, almost double the size of the US population. It accounts for one-quarter of all global games revenue with $37.9 billion in 2018. This makes China the leading games economy by revenue and number of players.

China, having the mind to protect its own mass of players, deploys censorship in many forms from complete bans to edited versions. Blockbuster titles are often either not officially released because of compliance issues like Battlefield 4 and GTA, or are completely banned like Monster Hunter Rainbow Six Siege: Siege, published by Ubisoft, was censored as they expanded into Asian markets and are forced to tone down imagery and content assets, complying with China’s regulations. Another way foreign game developers can enter the market is to partner with a domestic Chinese game publishers and through localization. Almost all of the top 25 global games companies have been impacted by China’s censorship in these forms. Just for scale, these companies represent approximately $49 billion out of $137.9 billion of the worldwide total games market revenue for 2018.

With this newly emerging global economy, politics will become more prominent in the end product. What is generally a lighthearted market for entertainment has seen an unexpected result of global consumption of censorship en masse, stemming from one country’s political values. China’s censorship already has become the norm, crossing borders digitally, setting the stage as the industry standard for the world.

Joe Dong is an Asian-American with a passion for technology and consumer electronics.