China's Regulatory War On Its Gaming Industry Racks Up 14k Casualties

from the video-game-industry-violence dept

It isn’t news that China has begun a campaign against video games within its borders. The battles in this war are being waged on a couple different fronts. In 2021, Beijing set new rules for what youths can play when it comes to games, as well as a strict schedule for when they can play them. This birthed an underground economy for account sharing to get around those rules, but the rules still had some effect. Chinese regulators also have exerted strict control over what foreign games are available in online stores, while those same regulators strictly control what games gain approval for release from within. This all seems to be some sort of legislative stream of consciousness from President Xi Jinping’s belief that video games are somehow massively harmful and addictive to children.

So what has the impact of all of this regulatory warfare produced? Well, according the South China Morning Post, no less than 14,000 shuttered gaming businesses within China itself.

China’s freeze on video game licenses continues. South China Morning Post notes that the National Press and Publication Administration (NPPA) has not released a list of newly approved titles since July 2021. Because of this, state-run newspaper Securities Daily reports, approximately 14,000 small game studios and video game connection companies, including those involved in merchandising or publishing, have gone under.

Typically, the NPPA approves around 80 to 100 games a month, so the lack of an approved list has ground part of the industry to a halt. China is such a massive market, and the hiatus has caused uncertainty that has led to layoffs at game companies, and conglomerates with game divisions. However, it sounds like the smaller outfits have been hit the hardest.

This is almost always the story when it comes to heavy-handed government regulations over an industry. The big players have the war chest and know-how to work within the regulatory system, while the small or up-and-coming companies simply fold under pressure. In this case, many of the larger gaming companies have diversified into off-shore presence in order to weather the storms from Beijing. Smaller companies don’t have the ability to do likewise.

And, in typical Beijing form, this freeze on approving new licenses to release games is being conducted with zero transparency.

No reason has been given for the hiatus, and the NPPA hasn’t stated when approvals will restart. Prior to this latest freeze, the longest period that new game licenses were not released was a nine-month window in 2018.

All of this coincides with China’s larger culture war, which has seen the government engage in control tactics as silly as regulating karaoke playlists to the far more serious destruction of democracy in Hong Kong. This means that the Chinese government is coming off less like a socialist nation and more akin to something like the Taliban, where strict control over culture is seen as some kind of spiritual requirement.

Regardless, it must be a very bad time to be a game creator in China.

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Comments on “China's Regulatory War On Its Gaming Industry Racks Up 14k Casualties”

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15 Comments
Anonymous Coward says:

Videogames have always been a popular target for moral fearmongering, because time spent on videogames is time that isn’t being spent on droll corporate drudgery. It hasn’t helped that spending several years in a pandemic has sharply redefined what people want out of their life.

What China wants is to distance themselves from everything "Western", including a culture heavily defined by popular media, and demonstrate how a frugal, hardworking ethic has led China to become the next superpower where the US has failed as a result of their focus on "hedonism" and "self identity". Of course, this doesn’t actually mean China has any idea of how to go about doing it, nor are they actually interested in the holistic welfare of their citizens – the CCP wouldn’t have spent so much time and energy trying to scrub discussions of "nei juan" and "tang ping" otherwise.

China is at a point in their relationship with the videogame industry where they can say, "Thanks for the money – I don’t need you anymore!" The government has decided that it’s established enough of a stronghold in the industry to break off the deal, now that it’s secured what it wants.

Anonymous Coward says:

Re: Re:

The same’s happened to the tutoring industry, after the government decided that the best approach to increasing the national birth rate was to defray the costs of bringing up a child – by completely fucking over one industry borne from a hypercompetitive society left to accelerate unrestrained, instead of actual soul-searching because that would require challenging norms held close to authoritarian values, like how Napoleon valued Boxer in Animal Farm. Up until Boxer could no longer provide any sort of benefit and was promptly sent off to the glue factory.

China really doesn’t want that to happen so they can crow to the rest of the world how their definition of "democracy" has succeeded where the US failed, but there’s only so much you can regulate before the entire system collapses upon itself. It can’t come soon enough.

Scary Devil Monastery (profile) says:

Re: Re:

"I wonder how much this will accelerate the pop of China’s economic bubble."

None at all. At least not while we in the west ensure China has a steady job in being our supply chain.

China can afford to beat their home industry up quite mercilessly because it all floats on a foundation of job security and money freely offered by western industries willing to bend over backwards to kiss the Pooh Bear’s ringpiece as long as it means access to the market containing 1/6th of the world’s population, and the convenience of not having to own a single factory in the Land Of Tort.

Anonymous Coward says:

China has no unions, people work 6 days a week 9 hours a day, video games are seen as a western cultural influence
And a distraction from work at this point China is like the taliban.
If in doubt ban it especially anything that is popular with young people and wonder at what point it will ban people live streaming it is ready to wipe out whole industry’s if it’s not in line with official policy Chinese game company’s ten cent are investors in many big Western game company’s so they can make money from western gamers
Gershin impact is a big hit with mmo fans all over the world
It might be they do not like anything that might be too popular with young people
Up til a few years ago 18 rated games were banned in Australia

Scary Devil Monastery (profile) says:

But...that's always been the case.

"This means that the Chinese government is coming off less like a socialist nation and more akin to something like the Taliban, where strict control over culture is seen as some kind of spiritual requirement. "

Timothy, there’s something I think you may need brought to your attention; When it comes to China strict control over culture has been the first overriding priority of government for two and a half millennia.

China has a long history of famines, social upheavals, anarchy, revolutions, etc – all of which led, in the end, to dynastic shifts after a great deal of suffering. And the country took a lesson from that history.

1) Social upheaval disrupts government.
2) Weak government causes massive harm through bad flood control, insufficient food production & storage, local warlordism and banditry, sectarian violence, organized crime and foreign usurpation and occupation.
3) *Suffering of the people causes social upheaval. Goto 1.

China will go, as they have in the past, to any length to preserve order. Controlling culture and social engineering is part and parcel of this. All of the Golden Shield project (great firewall, social credit ratings, border control) is an attempt to prevent chinese culture from changing. This is the core belief they have in autocracy. That government must be strong and remain completely, utterly unchallenged.

"If you open the window for fresh air, you have to expect some flies to blow in."

  • Deng Xiaoping, 1980’s, favorite saying re foreign influence.

The perception is that any change in chinese culture eventually leads to the loss of government control and subsequent disaster as the nation fractions into warring tribes who then go on to starve because the emerging warlords won’t give a tinker’s damn about food production, sanitation, transportation and health care. It may take China another millennia before they acknowledge that with more modern science many of those issues which shaped their culture are simply no longer relevant.

But up until that point the PRC will always come down hard on any phenomenon which may threaten their culture. Foreign influence. Games. Religions growing too big. Corporations growing too influential. Provinces and minorities advocating secession or autonomy.

Emperors and dynasties may come and go. Prominent politicians and institutions just the face which needs to be preserved to accommodate the illusion of infallibility.

In the end all of chinese politics are as pragmatic as a knife fight. Utterly unburdened with any principle other than don’t lose control. And the unceasing byzantine politics of the internal a necessity to make sure that none of the competing parties are ever seen as challenging the central authority.

As emperors go the Pooh Bear has a fairly strong standing. If he states video games are harmful to chinese culture then the bureaucracy’s overblown reaction isn’t just understandable. It was predictable ever since he was quoted as saying things to that effect.

Bilvin Spicklittle says:

This all seems to be some sort of legislative stream of consciousness from President Xi Jinping’s belief that video games are somehow massively harmful and addictive to children.

Do I really need to point out that you shouldn’t bother believing a politician’s stated beliefs?

There’s a simpler explanation. Games are a form of social media. People chat in games. They talk. They organize (guilds planning raids, etc).

If instead of games we were talking about newspapers, or chatrooms, or Tiannemen Square, would you still bother to type out horseshit about "his belief that Tiannemen Square presence was addictive to youth"? No, you’d just recognize that it was an attempt to keep control of the population so tightly that they can’t even begin to think about counter-revolution.

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Candescence (profile) says:

This means that the Chinese government is coming off less like a socialist nation and more akin to something like the Taliban, where strict control over culture is seen as some kind of spiritual requirement.

To be fair, this isn’t remotely new for the CCP. Also, the CCP hasn’t really been ‘socialist’ for years for the most part (to the point where they’ve increasingly been under fire from actual hardcore communists), they’re increasingly more like Nazis, especially considering they’re literally a step away from doing Holocaust 2: Muslim Edition.

Anonymous Coward says:

Re: Re:

Socialism has long been used as a dictator’s tool along with other forms of populist distractions like ethnic scapegoating and the resulting travesties. Pooh Bear has dusted off the old Maoism to use whenever convenient. Which has been Chekov’s gun foreshadowed by how they reacted to criticism of prior regimes – desiring association instead of distancing.

Scary Devil Monastery (profile) says:

Re: Re:

"To be fair, this isn’t remotely new for China."

FTFY. Information control, censorship, coming down hard on dissidents and citizens of China desiring autonomy…is millennia old.
And the PRC was communist the same way it was mongol – a brief historical aberration in a coup or revolution, and then straight back to the oligarchic ultra-authoritarianism they’ve always had.

You can look at Taiwan before the 70’s for a glance at how China normally operates under a strong leader. It wasn’t until Chang Kai-shek bit the dust and Taiwan had heavy interaction with western values that they adopted a functional form of democracy. And even there you can tell from the common free-form brawling in their assemblies that they really haven’t gotten used to not having a central authority keep the room to order.

I kid you not. Go to youtube. Search for "taiwan parliamentary brawl"…watch the scrolling pages of clips featuring politicians én másse partaking in the Fight Club over every issue.

"…they’re increasingly more like Nazis, especially considering they’re literally a step away from doing Holocaust 2: Muslim Edition."

There’s nothing "increasing" about it. And no, the closest contemporary form of nazism today would be the US GOP base. China has a rational, albeit horrible reason to do what they do. Same as the reason they came down on Falun Gong, Tibetan monks, Hong Kong believers in individual freedoms, and Winnie The Pooh.

Same as why they in olden days as an empire cracked down on buddhists, sects, and shaolin temples.

Face. Social order. A nation united.

China must appear undivided and culturally hegemonous. Every citizen of China must be a proper citizen of ancient Hua Xia. The government – whether emperors past or his present exalted Beariness – must be respected. Social order is to be preserved, unrest and dissent proactively destroyed.
This recipe is what has kept China as a nation in more or less unbroken cultural unity as a single country for thousands of years.

And the problem with telling them differently is this; You try telling a chinese politician about the merits of democracy and they will gently ask you to point out one single democracy of size to have lasted more than 500 years. You’ll be able to point at a few flyspeck republics not all that democratic and of course to San Marino…and that’s it. Not too surprising given that actual democracy didn’t come back in vogue until about two centuries ago.
The chinese politician will likely say something along the lines of "It sounds intriguing. Can you get back to us in a thousand years or so? We’ll have another look then".

China’s cruelty is rooted in a pragmatic approach to order über alles which on good days comes off as a thoroughly unprincipled approach to do whatever it takes to ensure some 90% of the country is too well fed, educated and prosperous to even dream of opposing the government. While using the remaining 10% as patsies, scapegoats and examples made why it’s not healthy to compare Emperor Xi to Winnie the Pooh. It’s ugly. Cruel. But it works.

The same can not be said about nazism which is rooted out of a pseudo-religious tangle of lies peddled to convince the least educated and impoverished no-hope losers they are the "Chosen people" unfairly oppressed by some minority who are simultaneously subhuman inferiors AND strangely able to wield superhuman powers of oppression over the majority in the "superior" race.

Nazism only works until it’s burned out every feckless moron dumb enough to believe in it since it inevitably comes into conflict with factual reality and science.
China’s autocracy otoh, seems to work pretty well for the most part if what you want is a cohesive national entity remaining largely unchanged for a few millennia.

BalanceBlind says:

I don’t understand what is the reason for the clash between China and the gaming industry. I like that the gaming industry is now quite actively developing. Although I still play csgo, which is quite old. Probably, now I’m more attracted to the possibility of trading skins on https://dmarket.com/ingame-items/item-list/csgo-skins. I didn’t think at all before that I can trade or exchange skins on this site.

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