China's video gaming market ended 2023 battered and bruised after the industry regulator proposed a rule change to curb excessive consumer spending on in-game items, causing a bloodbath among China’s gaming stocks that wiped out at least US$80 billion of market value in Shanghai, Hong Kong and New York. The National Press and Publication Administration (NPPA) in January retracted that proposal after a long-serving Chinese official involved in oversight of the video gaming industry stepped down. Fast-forward to July, and the industry catches a much-needed break. Video gaming publishers based in southern Guangdong province have been allowed since the start of this month to test new titles via certain app stores before a licence is granted by the NPPA, which marks an easing of strict industry regulations. This new, province-specific rule, unveiled earlier this month by the Guangdong Entertainment & Game Industry Association, aims to “solve the actual difficulties faced by online game companies in testing their products”, the trade group had said. Video game publishers are only required to register in advance with the province’s Press and Publication Bureau. The “app platforms in the province” that can be used to test new games were not identified. The rule appears to provide an advantage to Shenzhen-based Tencent Holdings, which runs the world’s largest video gaming business by revenue and operates super app WeChat. Guangdong is also home to some of China’s largest smartphone vendors that run their own app stores, including Huawei Technologies, Oppo, Vivo and Honor. Video gaming firms on the mainland must obtain a licence from the NPPA to publish new titles – covering products created for smartphones, gaming consoles and personal computers – before these are released in the market. This process takes some time and the regulator does not provide advance notice of approved titles. For many developers, the Guangdong-specific rule would provide relief from the mainland’s stringent licensing regime for video games, according to lawyers and developers. “In practice, some games that do not monetise in-app purchases have faced administrative penalties [for operating without a licence],” Shao Shiwei, a senior lawyer at Shanghai Man Kun Law Firm, said in a recent WeChat post. “At the same time, many games that do not have a licence have been released online without any problems. This is really a headache for game developers.” As such, many game developers see the rigid licensing process as a grey area in terms of whether they should test a new title with gamers before obtaining a licence or simply wait for the regulator’s approval. Olivia Qin, a mobile game developer based in the southern tech hub Shenzhen, said the new rule would make things easier for her and augurs well for a plan to start testing her self-developed game in 2025. “With the new rule, I’m quite relieved as I know an NPPA licence is not a must,” Qin said. Guangdong’s video gaming industry revenue grew 15.8 per cent year on year to 245.08 billion yuan (US$33.70 billion) in 2023, accounting for 80.9 per cent of the sector’s overall domestic sales, according to data from the provincial trade group. scmp.com/tech/policy/arti.. #Game addicts 🤪🎮