‘Thousands of Chinese companies close because government does not approve new games’

More than 14,000 Chinese game companies have reportedly closed their doors because China has stopped issuing new game licenses since last summer. Without these licenses, Chinese game developers are not allowed to release games in the country.

The game licensing authority in China has not published a new list of approved games since late July, and it is likely to remain so for some time to come, South China Morning Post reported, citing reports from the Chinese state newspaper Securities Daily. At the time, the authority gave the reason for the license stop that there would have been a relatively large number of approvals in the first half of the year.

It was not disclosed at the time of the announcement how long the temporary shutdown would last. Many game companies had hoped that the government would approve games again by the end of 2021, according to SCMP, but that didn’t happen, leading a lot of companies to close their doors. It is still unclear how long the approval pause will last.

In 2020, around 18,000 Chinese game companies closed their doors, while there are now more than 14,000 in six months. This does not only concern companies that develop their own games, but also Chinese companies that focus, among other things, on the publishing of game merchandise and advertisements. SCMP reports that this is the longest time without games being approved since 2018. Then there were no games approved for nine months due to a ‘regulatory reshuffle’.

The Chinese government increasingly regulates games. Last August, the game time for minors was lowered to three hours a week, and in September the government introduced new rules for game companies. Under those new rules, games in the country are no longer allowed to contain “violent or obscene content.”