China’s videogame regulator issued publishing licenses for 44 games from foreign countries for domestic release. This includes seven South Korean titles. It also lifted rigid restrictions that had hampered the sector for the past 18 months.
South Korean gaming stocks including Netmarble Corp, NCSOFT, Krafton, Kakao Gaming, Krafton, Kakao Game, and Devsisters, jumped between 2 and 17% during morning trade Thursday after Chinese authorities issued publishing licenses.
It is important that seven South Korean games were approved because China has been restricting the import of South Korean content ever since a dispute in 2017 over South Korea installing a U.S.-built missile defense shield. Only two South Korean games were approved before this list was created.
According to a release by the regulator, five online games imported by Tencent Holdings have been approved by the National Press and Publication Administration. These include “Pokemon Unite”, by Nintendo (7974.T), and “Valorant,” by Riot Games.
The initial list was released by the regulator of approved import games. Yoozoo’s, “Game of Thrones Winter is Coming”, was removed later, Wednesday without giving any reason. According to the September document published by the authority, Yoozoo does appear to have a license.
Yoozoo didn’t immediately reply to our request for comment.
According to an additional list, released Wednesday, the regulator approved 84 domestic gaming activities for December.
Effectively, the approval of imported video games marks the end of China’s clampdown on the gaming industry that began last August when regulators stopped the approval process.
In April, the game licensing process for homegrown games resumed. The approval of foreign gaming was considered the final regulatory hurdle to be lifted.
China is the largest market for video gaming, and it’s not like other countries. Video games must be approved by regulators in China before they can be released.
Tencent, NetEase Inc, and other Chinese tech firms have suffered a severe blow. They derive significant revenue from publishing games both imported and self-developed.
Tencent, which is the largest global gaming company in the world, received six licenses through various affiliate companies. This was according to Reuters sources who were privy to the matter.
Tencent received its first license for a commercial game in more than a year and a half last month. This was seen as a signal of industry policy normalization.
CD Projekt’s “Gwent: The Witcher Card Game”, and Klei Entertainment’s”Don’t starve were also approved.
In December, Tencent, NetEase, and ByteDance received approvals for their games.
Tencent shares, XD Inc, and iDreamSky share prices rose 0.8% to 5.2% in Hong Kong while Japan’s Nintendo (7974.T). gained 0.2%.
There are fewer licenses than in previous years. China has approved 456 imported games and 76 in 2021.
Pony Ma (founder of Tencent) stated this month at a year-end meeting that Tencent had to adjust to Beijing’s restrictive licensing system and that China would not approve many new games in the future.