Overseas studios to be eligible for domestic licences in China for games developed in Shanghai
The Shanghai Municipal Government is launching a new programme that will treat foreign-funded studios’ games developed in Shanghai as domestic titles.
This major policy change will be piloted as one of a number of new incentives to bolster Shanghai’s tech industry.
The government is looking to promote "the production, services and distribution" of digital games, as well as other media like film, television and digital music, according to an infographic released on Chinese social media site Weixin - translated via Google Lens.
"In due course, we will launch a policy pilot programme to treat game products developed by foreign-funded game companies in Shanghai as domestic games," the post stated.
Looking at licences
Chinese game licences have been tumultuous and unpredictable for a number of years, with a complete freeze in 2021 that only slowly thawed in 2022. Just 512 approvals were granted in what remained of the year - far from pre-pandemic highs.
A full year of approvals in 2023 saw annual licence approvals extended to 1,076 new games, and 2024 reached even higher with 1,416 approvals, according to South China Morning Post.
However, the majority of those approvals went to Chinese-developed games, with 1,306 domestic licences granted compared to just 110 foreign game approvals.
The potential for overseas studios to have their games treated as domestic could mark a dramatic change in the total number of approvals, therefore, and open up an important new revenue stream to many more companies.
Of course, this could also benefit the industry in Shanghai if more studios open branches in China’s biggest city and hire local talent to develop games.
Companies which already have Shanghai-based studios - therefore well equipped to benefit from the pilot programme - include Ubisoft and 2K.
Chinese policy changes
Other updates in the government’s policy change include tax deductions on software companies’ R&D expenses, as well as initiatives to reward such companies.
Financial rewards will be encouraged for software and tech companies making ¥20 million ($2.8m) for the first time, ¥1 billion for the first time, and over ¥2bn ($278.7m) per year with a growth rate at least 1.2 times the city average.
The updates have been unveiled weeks before ChinaJoy 2025, the country's entertainment and game expo with a record-breaking lineup planned for its 22nd edition.
Of course, ChinaJoy is being preceded this year by the inaugural Pocket Gamer Connects Shanghai, the exciting new chapter for our B2B conference series taking place on July 30th, 2025.