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China's video game industry revenue is down 1.8%, its first drop in 14 years

Strict national regulations and an extremely slow approval process has left even giants like Tencent and NetEase feeling stifled on their home turf.

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It’s well-documented at this point that China’s government has cracked down hard on video games and software distribution in the country. Between strictly limiting hours of play for youth, carefully monitoring online content, and slowing the game approval process to a near standstill state, the regulatory efforts in China have had an impact on publishers and developers in the nation. So much so that after many years of booming growth and financial success, China’s video game industry saw its first decline in players and revenue in over a decade.

This decline and the data that goes with it was shared in a report by financial news outlet Barron’s. According to the report, China’s video game industry saw a 1.8 percent decline in revenue for this year so far. It’s the first time that has happened for the Chinese video game industry in around 14 years. While the percentage might not be much of a decline, the fact that there has been a decline at all in the nation where international giants such as Tencent and NetEase are based is highly notable.

Tencent and NetEase's corporate logos.
Even giants like Tencent and NetEase were not able to keep China's video game industry from experiencing its first (albeit small) decline in 14 years.
Source: Tencent

The regulatory woes affecting China’s video game industry go back quite a bit with the government looking into video games as a cause of Myopia. However, the company also cracked down incredibly hard within the last couple years, introducing even stricter regulatory measures, such as limiting time in which young people could play online games. This, combined with an approval system which has been frozen off and on at least since 2018 can be cited as just a few of several causes of the decline. Reportedly, where around 755 games had been approved for release in China in 2021, only 172 titles have made the cut in the same amount of time in 2022.

Ultimately, with giants Tencent and NetEase investing heavily abroad in many of their endeavors and many smaller developers outright shutting down due to an inability to release games in the country, it may lead to developers and publishers continuing to look outside the country for opportunities. Stay tuned as we continue to follow this topic for further stories and updates.

Senior News Editor

TJ Denzer is a player and writer with a passion for games that has dominated a lifetime. He found his way to the Shacknews roster in late 2019 and has worked his way to Senior News Editor since. Between news coverage, he also aides notably in livestream projects like the indie game-focused Indie-licious, the Shacknews Stimulus Games, and the Shacknews Dump. You can reach him at tj.denzer@shacknews.com and also find him on Twitter @JohnnyChugs.

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