Beijing’s crackdown on unapproved games puts a wall around the Chinese gaming market

China’s broadcasting regulator, The National Radio and Television Administration (NRTA), has banned online platforms from livestreaming video games without approval, adding another layer of restriction to the industry just days after shutting down Tencent’s popular app which allows gamers to access foreign, unapproved games.

According to the NRTA, online platforms including TV shows, livestreaming sites, and short-form video platforms are barred from broadcasting or streaming video games that are not approved by regulators. That means a major avenue for Chinese gamers to educate themselves on the video games trending around the world has been blocked.

The new rules also stipulate that livestreaming platforms should have a “minor protection mode” to prevent teenagers and younger kids from video game addiction, and to bar them from spending money on streaming hosts. Selling virtual gifts is a popular form of content monetization for livestreaming hosts in China, so this move could impact their revenues.

Only a few days before the NRTA’s move, Tencent, the world’s biggest gaming company measured by revenue, announced the shutdown of its popular “game booster” service that helps Chinese gamers play unapproved titles from overseas and speeds up connections by circumventing restrictions imposed by the Great Firewall. NetEase has also been providing network acceleration tools to enable Chinese gamers to access foreign games.

Gamers in China have typically used such apps to access mega popular games like Grand Theft Auto or Animal Crossing. The “booster” has become a grey-area channel for foreign game developers to reach users in the world’s largest gaming market. But now that’s going to be a considerably harder challenge for game makers outside of China. Chinese regulators had only recently ended a nine-month freeze on new game approvals and officially granted a license to release 45 games, the bulk of which had been developed in China.

For many Chinese gamers, internet cafés have been a popular way to access a variety of PC games. But with loopholes continuing to be eliminated by authorities, it’s going to become much, much harder to play any foreign titles. It’ll be interesting to see if players spend less time at PC cafés as a result. According to Interpret’s New Media Measure: Global Profiles™, China’s population is highly engaged with internet café gaming, with 27% visiting a café to play in the past three months, considerably ahead of South Korea’s population at 16%.

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