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China Issues Video Game Licences Ahead of ChinaJoy Gaming Expo, Boosting Industry Outlook

China has recently granted a batch of video game licences in preparation for the country's largest gaming event of the year, ChinaJoy.

China Issues Video Game Licences Ahead of ChinaJoy Gaming Expo, Boosting Industry Outlook

The move signals a positive development for an industry that has endured a prolonged regulatory crackdown and was once criticized by state media as producing "spiritual opium."

The National Press and Publication Administration (NPPA), responsible for licensing video games in China, published a list of 88 approved game titles developed by domestic companies. While notable gaming giants Tencent Holdings, NetEase, and miHoYo were not among the approved companies, the licences demonstrate the government's renewed focus on supporting the industry, particularly smaller studios facing economic challenges.

Some of the notable titles approved include Sword of Convallaria by Shanghai-based XD, World of Sword: Origin by Guangdong-based Seasun (a gaming subsidiary of Chinese software developer Kingsoft Corp), and Delta Action by Shenzhen-based iDreamSky. Although these companies are considered second-tier game developers in China, their approval indicates a positive shift in the regulatory environment.

The number of licence approvals aligns with previous months this year, as Beijing continues to ease its year-long crackdown on the world's largest video gaming industry, which saw a freeze on new licences. In 2021, only 466 domestic approvals were granted, but in the year-to-date, the NPPA has already approved over 600 domestic games.

The upcoming ChinaJoy gaming expo, also known as the China Digital Entertainment Expo & Conference, will take place in Shanghai, marking an in-person event after last year's online-only edition due to strict zero-Covid rules. The expo, organized by China's Audio-video and Digital Publishing Association under the guidance of the NPPA and Shanghai's local government, will attract numerous gaming companies from China and abroad, including Microsoft and Sony.

Despite the positive outlook brought on by the licence approvals and gaming expo, the domestic video games market is still recovering from the effects of the regulatory crackdown and challenging economic conditions. Industry revenue experienced a 2.16% year-on-year decline to 22.5 billion yuan (US$3.15 billion) in April, as reported by gaming intelligence firm CNG, narrowing the 10.33% drop witnessed throughout 2022.

As the gaming industry gears up for ChinaJoy, the recent licence approvals offer a glimmer of hope for the sector's recovery and growth prospects. With the regulatory environment showing signs of relaxation, smaller studios and developers have an opportunity to thrive, contributing to the revival of the Chinese gaming market.



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