Tencent Holdings and NetEase, which manage China's two largest video game companies, received their first gaming licenses after a nine-month freeze by Chinese regulators, dispelling the cloud of uncertainty surrounding their main source of revenue .
The Public Administration of Press and Publications (SAPP) on Thursday released a list of 95 approved titles that it reviewed on Jan. 13, marking the fourth round of gaming approvals since the government's resumption of licenses in December. .
Tencent, NetEase and Perfect World Games have missed the first three rounds of new approvals, which tend to be awarded in the order that games are received for review. SAPP has now approved a total of 352 new titles since last March as part of a government restructuring.
The new gaming licenses are likely to ease market concerns over Tencent and NetEase, which see video games as the biggest contributor to their revenue.
"We expect a more significant recovery of the game's monthly approval number after the Lunar New Year. [holiday] and the National People's Congress, in March, set up an annual license of 2,000 to 3,000 copies, "said Karen Chan, an analyst at Jefferies, in a report released Thursday.
Tencent and NetEase did not immediately respond to requests for comments. Perfect World, based in Beijing, said it does not have any other information to share.
Tencent and NetEase Miss Again as Chinese Government Approves Third Series of Video Game Licenses
The pause in the approval of the games and the repression of the content have had a negative impact on the sector, which has experienced the lowest growth of its revenues for at least a decade. Billions of dollars in market value have been dropped from major players such as Tencent, listed in Hong Kong, and NetEase, listed on Nasdaq.
Chinese publishers are required to submit the games to the authorities for review before they can be sold on the domestic market. This process has been suspended since March. The SAPP – formed in April as part of a broader process of government restructuring – announced in December the resumption of the gaming approval process.
The Chinese authorities had already expressed concern about violent games and gambling addiction among minors. The Ministry of Education said it would "enforce regulations and controls" on online games, explore an age restriction system and reduce the playing time of minors.
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In response, Tencent announced in October the use of facial recognition technology to detect minors playing its games. He also made the age verification mandatory for those who connect to his successful mobile game. Honor of kings, which limits the playing time of minors.
Tencent received Thursday licenses for two less-known functional mobile games, which allow users to design wooden furniture and traditional Chinese folding fans.
The Shenzhen-based internet giant is still waiting for approval of two successful international survival shooter games, Fortnite and BattleGround of PlayerUnknown (PUBG).
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While Tencent has attracted millions of players for two remakes of PUBG on mobile and an office version of Fortnite via national test series, the company still needs licenses to monetize these free titles through in-app purchases, such as skins.
NetEase got a license for role play on mobile Spring and autumn war.
The biggest name among the latest batch of gaming approvals has been awarded to the mobile adaptation of the online martial arts franchise franchise of Perfect World. Tencent has the exclusive right to publish Perfect World Mobile # 3 video game company in China.