Interpret Weekly: Asia Entertainment 08/09/2021

Emperor Motion Pictures / Tencent PicturesHuayi BrothersLight Chaser Animation / Alibaba Pictures

China’s box office rankings this week elicited a sense of deja vu. The same four films in the same order led the weekend, and once again, only five movies even managed to earn over $1 million. The Benny Chan film Raging Fire starring action star Donnie Yen continued to lead with $21.6 million. The film so far has grossed $83 million.

Hollywood tentpoles Black Widow, Space Jam: A New Legacy, Jungle Cruise, and now The Suicide Squad have all rolled out Stateside but have given no formal indication of when or whether they will debut in China. Within hours, pirated versions of each have been widely accessible in China, shrinking the local pool of future ticketgoers with each day of delay.

Highly-anticipated Korean War epic The Battle at Lake Changjin, which was due to release on August 12, has been postponed to an unspecified date. The move was caused by a recent resurgence in COVID-19 cases in China, which led to movie theatre closures in high- and medium-risk areas including Wuhan, Nanjing, and Zhengzhou.

The new virus wave is also hitting China’s film festivals – the eleventh edition of the Beijing International Film Festival scheduled on August 14 – 21, and the sixth edition of the Jackie Chan International Action Film Week scheduled on August 6 – 8, have also been postponed.

Chinese director Chen Kaige’s U.S.-born son Arthur Chen Feiyu has swapped his American citizenship for a Chinese one. The move comes as Chinese public opinion about celebrities has hinged upon questions of nationality. For instance, Beijing banned mentions of China-born Chloe Zhao earlier this year — despite her Oscar sweep — after a frenzy of inquiry erupted online over her true nationality, among other issues.

Escape From Mogadishu held on to its place at the top of the South Korean box office for the second weekend. It comfortably overcame the challenge from newly released The Suicide Squad. Mogadishu earned $4.26 million in its second weekend of release, down only 14% compared with its first session, in which it took $4.96 million. Since its July 28, 2021 debut Mogadishu has accumulated $14.5 million, making it the sixth-ranking film released in Korea this year and the top locally-made title of 2021. The Suicide Squad opening earned $1.66 million over the weekend and $2.57 million since its release on Wednesday (Aug. 4).

Tencent has significantly cut down playing time for minors under 18 on its flagship game Honor of Kings. Players under the age of 12 will be prohibited from spending money in the game, and time restrictions on minors will also be tightened from 1.5 hours to 1 hour on non-holidays, and from 3 hours to 2 hours on holidays.

The announcement came shortly after Tencent and its flagship mobile game Honor of Kings were criticized in a Chinese state media article that described online gaming as spiritual opium and sent the company’s shares (together with the shares of other major gaming firms, such as NetEase and Mihoyo) tumbling more than 10% in early trade, wiping almost $60 billion from its market capitalization. The article was removed yet reappeared later in the day after some heated discussion and pushback with the historically loaded term “spiritual opium” removed and other sections edited.

Fosun Sports Group, the sports branch of Chinese conglomerate Fosun International Limited, announced it has acquired a minority stake in the Seattle-based esports organization Evil Geniuses (EG), valuing the team at $255 million post-investment. The agreement led to a strategic partnership between Fosun’s English Premier League team Wolverhampton Wanderers (Wolves) and EG. Their logos will be featured on both team’s jerseys. In addition, the Wolves and Fosun stated that they would pledge a training house and local facilities for EG “if the team qualifies for the League of Legends World Championship later this year in China.”

The mobile game market in Japan reached about $9.7 billion in the first half of 2021, according to U.S.-based Sensor Tower — up 63% from the same period in 2017. Chinese-made games have helped drive this rapid growth. Three titles from China were among the 10 top-grossing games in the just-ended half. Knives Out, a battle royale from NetEase, was No. 7. Role-playing game Genshin Impact came in ninth, while Houchi Shojo was 10th. No Chinese company had made the top 10 back in 2017, and the top 100 now includes 22 titles from China, up from just eight.

The company posted net sales of $2.94 billion for the three months ending June 30, 2021, which is a drop of nearly 10% over the same period the year before. Net profit fell to $846 million, which is a drop of almost 13%. The decline is due to an exceptional first quarter in 2020 for Nintendo, which was boosted by worldwide lockdowns caused by COVID-19 and the huge success of Animal Crossing: New Horizons, which shipped 10.6 million copies during the period. By comparison, the biggest game of this quarter was New Pokémon Snap, which sold 2.07 million units.

Overall, 45.29 million Nintendo Switch games were sold during the period, which is a decline of 10.2% year-on-year. In terms of console sales, Nintendo sold-in another 4.45 million units, which is a drop of 21.7%.

Square Enix has released its financial results for the last quarter, continuing to report steady growth overall but sales waned in its biggest video game subsegment. For the quarter ending June 30, net sales overall were up by 1.8% to $809 million. Operating income went up by 29.5% to $158 million and ordinary income saw an increase of 26.9% up to $160 million.

After opening in July 1993, the nine-story Sega Ikebukuro Gigo will cease operations and close on September 20. The game center has long been a test location for new arcade games in Japan, but more recently it has increasingly appealed to tourists. Tourists are currently banned from entering Japan due to the pandemic.

Arcades are struggling during the pandemic, with the face of Akihabara changing due to the shuttered game centers. Sega, one of the most dominant forces in the industry, even sold off 85 percent of its arcade business last November. Last year, another landmark Sega arcade, the company’s Akihabara 2nd arcade, shuttered.

The Chinese group, which raised about $5bn in December at a $180bn valuation, is planning to list in either the fourth quarter of this year or early 2022. After postponing its overseas listing this year, ByteDance has spent the past few months addressing Chinese regulators’ data security concerns, including providing more detail to authorities on how it stores and manages consumer information.

Kakao registered $142.4 million in operating income for Q2 2021. The result, a new quarterly high, is up 3.2% against the previous quarter and 66.3% against a year earlier. The growth was thanks to solid gains across the board, especially on ad revenue linked to its messenger app KakaoTalk. Its content business such as webtoon and entertainment IP sales abroad also made a solid gain.

Beijing prosecutors initiated a lawsuit against a Tencent subsidiary on Friday, saying the “youth mode” on the company’s popular social messaging app WeChat does not comply with laws protecting minors, but the filing did not say how the mode broke Chinese law. The “youth mode,” when turned on, limits young users’ access to some games and functions, such as payments or finding nearby friends.