Tue, Apr 23, 2019 - Page 10 News List

China outlines approval process for video games

Bloomberg

Chinese regulators have sketched out new requirements for video game approvals following a year of scrutiny, providing more clarity to Tencent Holdings Ltd (騰訊) and other players struggling with a crackdown in the world’s largest gaming market.

The Chinese State Administration of Press, Publication, Radio, Film and Television issued notices on Friday last week that detailed the documentation and processes required to get games approved for release in the country. Among other things, publishers would have to submit more information from measures to curb play addiction to detailed scripts.

More concrete guidelines are likely to benefit industry leaders from Tencent to Netease Inc (網易), which have struggled with a Chinese government crackdown on gaming addiction and other perceived social ills. Beijing froze approvals on new titles for nine months last year before restarting them in December, creating a backlog of thousands of titles awaiting the green light.

“This helps clear another regulatory overhang,” Jefferies Hong Kong Ltd analysts led by Karen Chan (陳翠珊) told clients in a note.

Shares of Tencent and Netease have not traded since the announcement because of holidays.

Daniel Ahmad, an analyst at Chinese game researcher Niko Partners, said the announcement was “extremely important.”

The regulator is to work through the backlog of titles submitted since August last year, as well as new applications after yesterday, Niko Partners said in a blog post.

It expects fewer than 5,000 new games to get the green light this year, with low-quality copycat, poker and mahjong games most likely to fail.

Personnel and structural agency changes that had held up approvals have now been completed, the researcher said.

Developers must now submit a host of details from screenshots and full Chinese scripts to specific anti-addiction systems they have installed within games, the notices said.

“With a new more transparent approval process set to go live soon, we have a positive outlook for China’s digital games market in 2019,” Niko Partners said.

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