China approved no new games in May, making domestic devs refocus on overseas markets

Gaming crackdown in China continues, as domestic developers still face regulatory pressure. As a result, the government approved no new titles in May despite ending the licensing freeze a month earlier.

Onmyoji: The Card Game

The National Press and Publication Administration (NPPA) didn’t issue a list of approved titles for May, according to a South China Morning Post report.

This might be a warning sign, considering that Beijing previously ended its almost nine-month licensing freeze and approved 45 domestic games in April. The list, however, was still relatively small compared to the pre-freeze era, when the NPPA approved up to 100 titles per month on average.

Another problem is that most games out of 45 approved in April were developed by small companies. Taking into account the pause that happened in May, Chinese game developers are concerned that the government has no plans to lift the restrictions.

As a result, some developers have already started seeking new opportunities overseas. For example, mobile studio Longtu Game, which employs over 600 people, wants to launch more games for global audiences. NetEase founder William Ding Lei recently stated that the company expects the overseas market to account for up to 50% of its revenue, in contrast to the current share of a little over 10%.

Tencent, the largest game company by revenue globally, reported last month that its domestic games revenue decreased by 1% due to the “minor protection measures” and other restrictions implied by the Chinese government.

So the ongoing crackdown affects even the biggest developers, not to mention the fact that around 14k small studios have closed in China since July 2021.