The National Press and Broadcasting Administration (NPPA), responsible for licensing video games in China, has not released a list of new approved games since the end of July. After a 9-month hiatus in 2018, these regulations, which will last through 2022, will be the longest suspension period.
Restrictions in China are thought to last through 2022. Because of this, many small companies associated with the game industry went bankrupt. Chinese game giants began to intensify their activities abroad.
As a result, 14,000 companies associated with many games-related in the merchandising, advertising, and publishing fields went out the business and bankrupt. According to the Chinese State-owned Securities Daily news, this is the second big wave after 18,000 companies closed during 2020. If a positive regulation is not made in 2022, this number may increase.
Larger companies such as TikTok owner ByteDance, online search giant Baidu and Tanwan Games are trying to reduce their losses by laying off people working in their activities in the game industry. Gaming giants such as Tencent Holdings and NetEase transfer more resources abroad and move some of their activities overseas.
Tencent, one of the biggest game companies globally, plans to open new game development centers in Singapore under its subsidiaries such as TiMi Studio Group. TiMi Studio is the developer behind Tencent’s most significant mobile game hits, Honor of Kings and Call of Duty: Mobile for those who don’t know.
China continues its restrictions on mobile apps and games. Of course, the regulations have purposes, but these regulations affect the game studios negatively. The policies to be pursued through 2022 will profoundly affect Chinese companies. Some media interpret this news as a “Chinese game crisis.”