China Accelerates Mobile Entertainment Industry Normalization... 60 Games Approved

[Asia Economy Reporter Kim Hyunjung] China is accelerating the normalization of the mobile entertainment sector by resuming the issuance of game licenses that had been suspended for several months.

According to Bloomberg on the 7th (local time), the National Press and Publication Administration of China announced on its website that it granted licenses to 60 domestically produced online games that night. Issuing a license means approving the game and granting it a license. In April, licenses were issued for 45 games. Major Chinese game companies such as Mihoyo, Perfect World, Hero Games, and Perker were among the companies that newly obtained licenses this time.

Issuing licenses is the biggest risk factor for game companies in China. After issuing licenses in July last year, China did not issue a single license until April this year without explaining any policy background. Externally, the main justification for regulating the game industry was protecting minors and preventing game addiction.

Due to strong regulations, China's game industry has faced difficulties. Large internet companies' game divisions such as Tencent, ByteDance, and Bilibili have experienced large-scale layoffs since last year, exacerbating unemployment among highly educated professionals in the technology sector. Tencent, China's largest internet company, reported a net profit of 23.41 billion yuan (approximately 4.4 trillion won) in the first quarter of this year, down 51% compared to the same period last year.

Licenses have still not been issued to the two major industry players, Tencent and NetEase. The last time Tencent and NetEase received licenses was in July 2021. However, due to expectations from the license issuance on this day, the stock prices of Tencent and NetEase rose more than 3%. The live streaming platform Kuaishou Technology jumped 5.8%.

Citigroup analysts stated in an investment memo, "There is a high possibility that titles from Tencent and NetEase will be approved collectively in the future," adding, "This will send a positive signal of license issuance or policy support for the entire Chinese internet sector."

This content was produced with the assistance of AI translation services.