60 new Chinese online games receive formal approval
China’s National Press and Publication Administration on Tuesday released details regarding the regulatory approval of new domestic online games in June, comprising a total of 60 titles and involving companies such as miHoYo, Migu Interactive Entertainment and Hero Games. .
This is the second batch of online games that have been reviewed in China so far this year. In April, a total of 45 Chinese online games got formal approval for publishing and operations. Affected by the news, US shares of Chinese concept game stocks rose, with Bilibili up more than 5%, while NetEase and Douyu each increased by 2.5%.
New games from Tencent and NetEase were still not included in the latest round of approvals. The combined market share of these two companies exceeds 60%. However, market analysts believe that they will not miss the approval of game publishing and operations, and the new games will help local market business to return to the growth channel.
Due to the impacts of COVID-19 and other factors, game companies are expected to face a challenging business environment in the second quarter of this year. Within the framework of a regulatory framework aimed at preventing the addiction of minors, segments of activity such as the distribution of games are also concerned.
Tencent‘s core business, value-added services (including its gaming and social media revenue), had revenue of 72.7 billion yuan ($10.9 billion) in the first quarter of 2022, an increase of only 0.41% year-on-year. Gaming revenue in the local market fell 1% to 33 billion yuan ($4.95 billion), mainly due to the direct and indirect impacts of various child protection measures, limiting the number of active users and paying.
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Previously, there was uncertainty about when Chinese authorities would issue game publishing and operating approvals, and game companies generally lowered their expectations for 2022. According to the “2021 China Game Industry Report” from Gamma Data, the game’s revenue in China market in 2021 was 296.513 billion yuan ($44.48 billion), a year-on-year increase of 6.4%, a growth rate markedly slower than 20.71% in 2020. Mobile game revenue was 225.538 billion yuan, further increasing the overall proportion.