China Approves More Imported Games As Crackdown Eases

China’s gaming regulator has granted licences for the domestic release of 27 foreign games, less than three months after its last tranche of approvals at the end of 2022, in a sign that the country is gradually reopening its market to international imports following a period of strict regulation.

The National Press and Publication Administration last approved foreign games in December of last year.

Before that approvals on such games were halted for 18 months starting in August 2021, when the gaming approval process was suspended altogether.

Officials began issuing licences for domestically produced games in April 2022, but imports had to wait several more months.

Crackdown

The period of suspension coincided with a wide-ranging crackdown by the government that included the introduction of strict limits on online game-playing time for minors to curb gaming addiction.

The government said last November its measures had solved the gaming addiction problem.

In December the regulator approved 45 foreign games, including Nintendo’s Pokémon Unite and Riot Games’ Valorant.

Of the latest 27 games, seven were developed in Japan and five in South Korea.

The 22 mobile and three PC titles are to be released by leading Chinese gaming companies including Tencent Holdings ,the world’s biggest video game publisher by revenue, and NetEase, China’s second-biggest gaming company.

Industry support

Tencent received a licence for mobile discovery puzzle game Merge Mansion from Finland’s Metacore, while NetEase was granted a licence for Audition: Everybody Party, a mobile game based on a popular Japanese dance and rhythm game.

Entertainment giant Bilibili was approved to release Shanyao! Youjunshaonu, the Chinese version of Uma Musume Pretty Derby, developed by Japan’s Cygames.

“We believe this implies a more supportive regulatory policy towards foreign titles that further support a healthier and normalised development of online gaming industry going forward,” wrote Citi analysts in a research note on Tuesday.

“We expect there could be two to three more imported batches in 2023, bringing total imported titles to 100 to 120.”

Economic headwinds

If the Citi figures are accurate, the number of imported games would reverse a trend of declining imports that preceded the crackdown.

In 2020 regulators approved 97 imported games and in 2021 they approved 76.

Last year a total of 468 domestic games were approved, down 38 percent from 2021, and only one-third the 2020 figure.

China’s video game sales slid by more than 10 percent last year to 269.5 billion yuan ($39.8bn, £32bn) amidst a broader decline in consumer spending, according to a report last week by China’s gaming industry association.