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My personal experience of Chinese video games goes back to the Chinese government banning the Codemasters game IGI2 in 2004. A massive blow when we had no sales or distribution there!

I have pointed out on here before, China has a rich heritage of Gold Farming with about 400,000 people employed in this “industry”. So there is a very big understanding there of game mechanics and business models. And it is hardly surprising that the dominant games are MMOs and the dominant platform the PC. One of the largest PC manufacturers in the world, Lenovo, is Chinese.

Also there is a cluster of game development studios in Shanghai which grew out of Ubisoft’s (OTCPK:UBSFY) decision to site a major development studio there.

The Chinese game market is exploding. Q2 turnover this year was 40% up on Q2 last year. Total turnover there could be as high as $4 billion this year. So it is a substantial and well established market. The government are repressive of games from abroad because they fear cultural pollution. At the same time they actively encourage the export of Chinese games so as to spread their own culture. Double standards.

Like many governments they are trying to control the game industry. In the latest news:

  • An Internet Publishing License will be required to publish online games.
  • There will be an approved management system for imported online games.
  • Unapproved online games cannot be exported.
  • Bodies promoting the export of unapproved games will be banned.
  • Games not registered before publication will be suspended.

The Chinese General Administration of Press and Publication has inspected over 200 online games (which gives you an idea of just how vibrant the market is there). They found:

  • 3 websites were publishing unapproved imported games. It doesn’t say whether or not these were pirated
  • 25 Chinese made games had added unsuitable content after approval. Which gives you an idea how much they respect the rules. Unsuitable content includes violence, gore, and sex. They don’t seem to have twigged yet about the gambling content in some of these games.
  • 9 Chinese games hadn’t followed the correct publishing procedure.
  • 7 Chinese games didn’t have a fatigue testing system. Presumably the government don’t want people playing these games for excessively long periods of time. And quite right too.

So we have a big market that will grow to be immense but which is dominated by government red tape and some “interesting” local game producers.

Source: China Gaming: Right Now, Only China Is Holding It Back