Media: China is preparing to resume issuing gaming licenses after four months of "freezing"

In the near future, the Chinese regulator will again issue licenses to online games. He hasn’t done it in four months. Against the background of such news, the shares of local giants Tencent and NetEase increased in price.

The termination of the “freeze” was reported yesterday by the Chinese edition of the 21st Century Business Herald, citing its own sources. According to the portal, the games will begin to receive permission for release in China at the end of November.

Another Chinese portal, the South China Morning Post, also spoke about the resumption of issuing licenses in the near future, but did not name the exact date. He referred to the words of the heads of three gaming companies and noted that the suspension will end “in a few weeks.”

Local developers are not too optimistic yet. It is assumed that at first licenses will be issued to a very small number of games. This is probably due to the fact that licensing rules were tightened in China in October, and now the authorities must make sure that the games meet the new requirements. For example, whether they are distorting history and not talking about LGBT topics.

Also, one of the heads of gaming companies in an interview with the South China Morning Post noted that censors will primarily approve “high-quality” exclusive games. But blockbusters will have to wait.

Chinese media reports have had a positive impact on the share price of companies associated with the games. Yesterday, Hubei Century Network Technologies (a local Internet giant and mobile game developer) shares rose by 20%, NetEase — by 4%, and Tencent — by 2%.

However, we note that today NetEase shares have managed to fall in price again by almost the same 4%. Perhaps part of the reason for this was the dissatisfaction of gamers with the Harry Potter: Magic Awakened mobile game — users were not satisfied with the sexualization of facial expressions of female characters during fights. Shares of Hubei Century Network Technologies also declined slightly compared to yesterday — by 6%. Meanwhile, the value of Tencent continues to grow.

Recall that online games have not been licensed for publication in China since the end of July. This is the longest “freeze” since 2018, when the regulator did not approve titles for nine months.

The National Press and Publications Authority (NPPA), which is responsible for issuing licenses, did not comment on the situation.