Small game companies keep going out of business, and larger studios suffer losses as China's freeze on gaming approvals continues.
China’s licensing freeze extended to 2022. Nearly 14,000 development studios in the country have closed their operations since a freeze on video games approval was issued. The slowdown in gaming approvals started in the middle of 2021, and it keeps going.
Normally, the National Press and Publication Administration (NPPA) approves around 80 to 100 games a month. However, as the South China Morning Post reports, a list of approved new video game titles hasn't been released since the end of July. As a consequence, about 14,000 small studios and gaming-related firms got shut down. The figure comes from a report by a state-run newspaper Securities Daily that uses data from Tianyancha – a business registry tracking firm. It also provides the 18,000 figure – the number of companies that were shut down in 2020.
While small studios and video game connection companies keep going out of business, the larger firms also suffer losses. ByteDance (the owner of TikTok), Baidu (the major internet technology company in China), and Tanwan Games take their toll by laying off their employees in the video games segment.
In comparison, such tech leaders as Tencent and NetEase keep investing in overseas markets in order to balance the regulatory issues in China. For instance, Tencent acquired several western studios last year, including Sumo Digital and Turtle Rock as well as took stakes in some other firms, like Klei Entertainment, Spec Ops: The Line studio Yager, and UK studio Playtonic.
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