China’s video game industry has experienced its first decline in users and revenue in 14 years, according to a new report from Barron’s. (Opens in a new tab). The report comes a year after the Chinese government imposed tight restrictions on the country’s entire tech industry — restrictions that have recently shown signs of relaxing.
According to experts interviewed by Barron’s, China’s gaming industry, especially big companies like Tencent and NetEase, is struggling for new game releases that have been frozen for eight months in Beijing’s approval process. Last year saw China impose new restrictions on the amount of time children under 18 can spend playing online games. (Opens in a new tab) and further censorship of in-game content, making it difficult for the country’s gaming industry to operate at home.
According to the South China Morning Post, 14,000 “small studios and game-related firms” have been shut down since December 2021. (Opens in a new tab). In the year Things aren’t any better in 2022: only 172 games have been approved for release by the Chinese government this year, compared to 755 approved for the same period in 2021. Most of those approvals have been granted to a relatively small number of game developers and publishers. NetEase and Tencent remain frozen.
Barron spoke to business professor Nir Kshetri, who explains the government’s reluctance to approve licensed foreign games and “hardcore” (which I think we can easily translate to ‘big budget’ or ‘AAA’) games ” [Tencent and NetEase’s] Get into overseas markets faster.” In other words, it’s one of the reasons why Tencent continues to buy overseas gaming companies. (Opens in a new tab) It is not eating at home.
The report paints a very chaotic picture of Chinese gaming development at the moment. Although another expert Barron’s spoke to, Daniel Ahmed, predicted that pressure on Nico’s partners – Tencent and NetEase – would ease pressure on future game approval teams, it seems unsurprising that those companies will focus on overseas markets such as the US. Meanwhile, Chinese game companies without the wealth of gargantuan multinationals have shut down in desperation over the past year, the report said.
In the year In 2020, we explored China’s exciting indie game development scene. (Opens in a new tab) And it was a dangerous place at the time. The situation does not seem to be more favorable for small studios in the last two years, but the good news is that the introduction of Steam China has not ended the ability of the Chinese people to find a global customer of Steam as a threat, and we will continue. Check out the exciting games from China appearing on the global Steam Store. In April, Steam held a week-long event (Opens in a new tab) Highlighting games from China.
