China’s gaming regulator makes approvals after crackdown but Tencent misses out again

The third round began on Tuesday (January 22) when the regulator resumed work for the first time in 2019.

The nine-month-long Chinese government crackdown on domestic video games, which included freezing approvals and banning titles, ended at the end of 2018, but regulators continue to ignore gaming giant Tencent’s games.

The first round of approval by China’s gaming regulator, The State Administration of Press, Publication, Radio, Film, and Television, after the crackdown began on December 21, 2018, before it published another list of 80 approved titles 10 days later.

The third round began on Tuesday (January 22) when the regulator resumed work for the first time in 2019 by licensing another 93 new batches of video games, bringing the total number of games approved to 257.

The crackdown by the authorities was due to concerns over violent games and gaming addiction among minors, stating that it would “implement regulations and controls” on online games, explore an age-restriction system and reduce gameplay time by minors.

What was conspicuously missing from all three rounds of approval were games produced by gaming giant Tencent, has seen its business taken a significant impact because of the regulatory changes and reported its first profit decline in a decade and has lost more than $200bn in market value since the start of 2018.

This has forced it to look to overseas markets for its gaming business, signing an agreement with Singapore-based Sea, of which it is the largest investor, to allow Sea's digital entertainment arm Garena to publish Tencent’s mobile and computer games in Indonesia, Taiwan, Thailand, the Philippines, Malaysia, and Singapore.

It announced its first restructuring in six years at the start of October 2018, consolidating its business units combining online and mobile internet into one unit and will launch a new division to focus on business services and cloud computing.

As part of the restructuring, it cut the marketing budget of its gaming division and reduced the branding budgets for mature games into half and cutting spending to games not coming out until 2019, as well as for underperforming games.

According to The South China Morning Post, the latest round of license approvals included titles submitted for reviews in April 2018 and as approvals tend to be granted in the order they are received, Tencent might still be on a waiting list.

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