China opens the door to foreign video games again

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China opens the door again to foreign video games

Beijing has been putting pressure on the country's powerful technology companies for months.

China on Wednesday granted, for the first time in 18 months, licenses to foreign video games, a sign of a certain relaxation in a sector that was once battered by Beijing.

Video games, which represent an important economy in China, were in the crosshairs of the authorities last year for their addictive side among the youngest.

The authorities had then frozen for nine months any new license, mandatory to market a game on the world's largest market.

Licensing finally resumed last April, but no video games foreigner had so far been unable to obtain the precious green light.

On Wednesday, 44 foreign games received authorization for marketing, according to what the Chinese government said. The Japanese Nintendo obtains in particular a license for its game Pokémon Unite, launched in July 2021. The last authorization for a foreign game on Chinese soil dates back to June 2021.

China typically only endorses foreign games a few times a year, unlike a monthly practice for local titles. At the same time, 84 Chinese games have also won an authorization.

This is a good start for a sector that has been tested by regulatory tightening, from after Vincent Teng, head of video game specialist firm Gamma Data.

The decision to allow more foreign games will enhance creativity [and] improve the [overall] quality games [in China], Mr. Teng believes.

In November, authorities granted Chinese heavyweight Tencent its first license in a year and a half. The decision had sent a positive signal to the markets, which had seen a relaxation of the authorities towards this very lucrative sector.

Beijing's takeover of the sector had in particular was marked by draconian restrictions imposed on players under the age of 18. Their online gaming time is now limited to three hours per week, which weighs heavily on the profitability of companies in the sector.

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