China’s top regulator has stopped accepting applications to monetize new video games as it processes a large backlog from a nine-month pause last year, reports say.
The development smashes hopes of a return to business as usual after the resumption of approvals in December, and bodes continued trouble in the world’s largest gaming market.
Typically, Chinese game companies file monetization applications to their local authorities, who then submit them to the General Administration of Press and Publications (GAPP). But a GAPP official confirmed that the body was “not taking any application materials at the moment” as it was making “adjustments,” according to state-backed outlet ThePaper.cn. The new hiatus was confirmed by Reuters, which said a notice about it had been issued this week, citing three people with knowledge of the matter.
The GAPP stopped processing new applications last March due to an administrative reorganization as well as concerns over violent content, gaming addiction, and myopia among young players. It only resumed approvals in December and has since processed just 538 games. Analysts estimate that some 7,000 games are stuck awaiting approval.
Authorities have said they planned to process about 3,000 games in 2019, although in years past, they were able to get through between 7,000 and 8,000, Newzoo financial analyst Michiel Buijsman told Variety last month.
“The regulator asked local authorities to stop submitting applications because there is too much of a backlog for it to deal with at the moment,” a person whose company had been told by local authorities of the new pause told Reuters.
Gaming companies saw their stock tumble during last year’s freeze, with Tencent losing billions in market value. It has still been unable to monetize its blockbuster games “PlayerUnknown’s Battlegrounds” and “Fortnite.”
“Generally speaking the whole industry is frightened. There is no sign that regulators will loosen their control,” Beijing-based tech analyst Li Chengdong told Reuters.
