Under Chinese law, game developers are required to obtain a license to sell games on the App Store and other app marketplaces. However, it seems that China continues to refrain from issuing new game licenses to app developers producing for the App Store and other platforms due to regulatory inaction in the country that has caused thousands of small game studios and related companies to go bankrupt.
The regulators’ decision to cease licensing in late 2021; It is expected to continue in 2022. On the other hand, the National Press and Broadcasting Administration (NPPA), which licenses games in China, refuses to publish lists of newly approved games.
It is estimated that 140,000 businesses went bankrupt due to the ban.
According to reports, approvals for new games in the first half of 2021 were considered “a little too aggressive” and regulators decided to suspend game license approvals in July. At the time it was not specified how long this ban would last; however, the ban, which began at the end of July, has become the longest suspension of new gaming licenses since the nine-month cut in 2018, according to the South China Morning Post. While the NPPA has not officially given a reason for the current suspension, it is thought to be related to government gaming pressure, which includes restrictions on playing time for minors.
The impact of the regulator’s decision to refrain from providing new licenses is causing many problems for game developers in the region. Nearly 140,000 businesses in the gaming industry have allegedly gone bankrupt since the decision was made in July, including studios and firms that sell publishing, advertising and games. In comparison, it is stated that 180,000 game companies closed in the whole of 2020.
To comply with local laws, Apple has been suspending updates from the Chinese App Store, which is not licensed from the NPPA, since July 2020. The fact that a game is unlicensed naturally means that it cannot be submitted to the regional App Store or updated. The effects of this lack of new licenses are being felt by the big players as well. TikTok’s owners ByteDance, Baidu, and Tanwan Games have fired their game units in response, while Tencent has begun to transfer more resources to foreign markets.
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