China will buy 44 foreign video games and give Tencent a number of licences to do so.
China’s video game regulator granted publishing licences to 44 foreign games, including seven from South Korea, so they could be sold in China. This was another step toward loosening the strict rules that have hurt the industry for the past 18 months.
South Korean gaming stocks like Netmarble Corp., NCSOFT, Krafton, Kakao Games, and Devsisters rose between 2% and 17% in the morning trade on Thursday, a day after Chinese authorities granted publishing licences.
Since a dispute in 2017 over South Korea’s installation of a U.S. missile defence shield, China has limited the import of South Korean content. So, the approval of seven South Korean games is a big deal. Before this list, only two games from South Korea were allowed.
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The National Press and Publication Administration has approved five imported online games to be published by Tencent Holdings (OTC: TCEHY). These games include “Pokémon Unite” by Nintendo and “Valorant” by Riot Games. The regulator has released a list of the games that have been approved.
At first, the regulator put out a list of 45 imported games that were okay. Later on Wednesday, it took down “Game of Thrones: Winter is Coming” by Yoozoo without saying why. A document that the authority put out in September, however, shows that Yoozoo already has a licence.
Yoozoo didn’t answer right away when asked for a comment.
A separate list made public on Wednesday shows that the regulator also gave the green light to 84 domestic games for the month of December.
China has been cracking down on the video game industry since August of last year, when the approval process for games was put on hold. With the approval of imported games, the crackdown is over.
In April, regulators started giving game licences to games made in the country again, and the approval of games made in other countries was thought to be the last regulatory barrier to be removed.
In China, which has the biggest gaming market in the world, regulators have to approve video games before they can be sold. This is not the case in most other countries.
The year-long crackdown on the industry has hurt Chinese tech companies like Tencent and NetEase (NASDAQ: NTES) Inc., which make a lot of money from publishing both homegrown and imported games.
A source who knows about the situation told Reuters that Tencent, the biggest gaming company in the world, got a total of six licences in December. This was done through a number of related companies.
Tencent didn’t get its first commercial game licence in over a year and a half until last month. At the time, this was seen as a big step toward normalising policy in the industry.
“Gwent: The Witcher Card Game” by CD Projekt and “Don’t Starve” by Klei Entertainment are two other imported games that have been given the green light.
In December, games from NetEase, ByteDance, XD Inc., and iDreamSky were also given the green light.
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Shares of Tencent, XD Inc., and iDreamSky all went up by between 0.8% and 5.2% in Hong Kong, while Nintendo’s stock in Japan went up by 0.2%.
Licenses are being issued at a lower rate than in previous years.China gave permission to import 76 games in 2021 and 456 games in 2017.
Pony Ma, the founder of Tencent, said at a meeting at the end of the year that the company had to get used to Beijing’s strict licencing rules and that China would only approve a small number of new games in the long run.