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China approves 87 new game licenses

Tencent, NetEase, and Alibaba are among the game makers to receive new game approvals
China approves 87 new game licenses
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China has approved the release of 87 new games in February, reports Reuters.

The country imposed a hiatus on game licensing in July 2021, with no new licences being issued until April 2022. While China has been approving new games for release, there has been a notable slowdown compared to previous figures, compounded by the company’s attempts to curb video game addiction by imposing strict limits on playtime for young gamers.

However, the fresh wave of approvals could signify that the country is taking steps to help maintain its place as a market leader in the mobile industry and support local mobile gaming giants. It could also show that Chinese regulators have been paying attention to the performance of the mobile gaming industry worldwide as other markets eased restrictions and saw declining revenue following a period of unprecedented growth.

Among the games to receive licences in the latest round of approvals are Tencent’s title Wangzhewanxiangqi, Alibaba’s Chunqiuxuanqi, and the NetEase game Journey to the West: Shikong.

Are the bad times over?

2022 was a tumultuous year for the mobile gaming industry, and arguably China’s unique place in the space saw it struggle more than most markets. The country has long been the largest mobile gaming market in the world, but 2022 saw the country’s mobile sector decline for the first time in two decades, with Chinese internet firms reporting their first ever combined decline in revenue.

Notably, China maintained strict Covid lockdown policies until December 2022, which may have helped bolster mobile gaming revenue as consumers continued to turn to mobile games due to their inability to access other forms of entertainment.

Notably, China has been taking so-called golden shares in a number of mobile games giants, helping it maintain a certain level of control over their releases, perhaps signifying that while it wants to see these companies succeeds, it wants them to do so on its terms.

Ultimately, it is possible that this large wave of new licences is an outlier, and that the country will soon return to its previous trajectory. Notably, analysts are predicting that leading game maker Tencent, formerly the biggest company in China, will see a resurgence in 2023, which could signify a positive year for the Chinese industry.

We listed Tencent and NetEase as two of the top 50 mobile game makers of 2022.