China’s controversial game licensing system, requiring approval from the government and working with publishers or establishing branches in China, is now set to be extended to all applications on mobile.
According to Reuters these new rules will require all mobile app providers in the country to register their details with the central government - a process which would require them to either establish themselves in China or work with Chinese publishers, as many game developers and companies have already done.
China’s game licensing system has already proven to be a major problem for developers and publishers both inside and outside the country. A major licensing freeze effectively halted the approval of new games from both domestic and foreign makers, causing major shockwaves throughout the industry.
While the intention may be noble, it’s important to note that the companies most able to weather the protracted period of instability that the licensing freeze caused are the biggest, such as NetEase and Tencent. This effectively means that smaller companies are more likely to go under or face difficulties as a result.
A knock-on effect?
The expansion of these regulations to all mobile apps - although not in the explicit form they take with games, involving individual licence approvals - could therefore spell a significant problem for smaller developers and publishers. It also underscores that, as far as the mobile ecosystem is concerned, games are the most visible section of mobile that is affected first by stringent regulations.
Ironically, by tightening the leash on the industry, Chinese authorities may be creating the conditions necessary for major companies like Tencent and NetEase to monopolise gaming in the country. After all, Tencent also develops WeChat, the “everything app” that Western corporations are eager to emulate. But this latest change in the regulatory environment is a further showcase of just how different China’s mobile market is to the West as a whole.
This new crackdown may also intensify interest in other major markets, particularly India. Whereas China has been quick to crack down, without much room for negotiation, authorities in India have at least listened to their game makers in some form or another. With companies like Mixi wanting to put big money into startups the path - at least for now - remains clear for India to become a new hotbed of mobile innovation.