The National Press and Public Administration (NPPA), the body responsible for issuing gaming licenses, has issued 88 new licenses this year. This is excellent news for gaming companies and players, as China now seems to have relaxed its grip on the industry, allowing some breathing space for gaming companies.

China has the world’s biggest online gaming market, with more than 664 million active players. However, the sale of video games dropped by over 10% in 2022, coming as a shock to the entire industry. Rising regulatory pressures, economic slowdown, COVID-19 restrictions, and sluggish consumer demand led to declining game sales in China, a first-ever trend seen since 2003.

China implemented some of the toughest video gaming rules to combat gaming addiction and clean up content. These restrictions shaved off the market value of some of the biggest gaming companies including Tencent and NetEase and led to the closure of more than 200 gaming studios. In 2022, mobile game sales, which account for over 70% of total sales, declined 14.4% to 193.1 billion yuan ($28.05 billion). 

In 2022, due to the drop in gaming revenue, Tencent lost 24.7% and NetEase lost 27.3% in market value. However, the new round of licenses added life to the industry and helped the shares of both companies to rise by almost 21% in 2023. 

2023 marks a fresh start for the gaming industry in China. The world’s largest video gaming company (by market share) Tencent Holdings and other big players like NetEase and miHoYo have got licenses for new games this year. Tencent got three domestic licenses including one for its upcoming action game Undawn, developed by LightSpeed studio and Alchemy Stars, a tactical mobile game developed by Tourdog studio. NetEase, on the other hand, got approval for the shooting game Badlanders which has already been released globally but was waiting for approval in China.

The Shanghai-based miHoYo, which developed the world-famous mobile game Genshin Impact, got the license to launch the much-anticipated installment of the Honkai Series called Honkai: Star Rail. Other notable firms that got licenses in 2023 include Hong Kong-based XD Inc, Shenzhen-based Perfect World, and Shanghai-based 37Games.

The number of games approved to date in 2023 is higher than the number of monthly games approved last year. Last November, after an 18-month hiatus, the NPPA approved licenses for 84 new games by domestic developers and 44 imported games. This brings hope that the gaming sector will be revived and Beijing is now ready to allow more options to its gaming audience. 

Experts are predicting the approval of 800 to 900 new gaming titles in 2023. This will be way more than the approvals made in the last couple of years. 

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(Source)

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