What is Happening In Chinese Gaming Industry Recently? Licenses Halted?

A weaker yuan makes Chinese exports cheaper cushioning the impact of the tariffs imposed by US President Donald Trump

Chinese Internet Titan Tencent Falters After Chinese Gov. Bans Game AFP 14 Aug 2018

Tencent said that smartphone games revenues were up 19% in the second quarter year-on-year, but they dropped by 19% compared to the first quarter.

"At this point in time, we don't have visibility on when exactly the official approval will start yet", said President Martin Lau on a conference call with investors. The Shenzhen-based company has lost more than 30 percent of its value since a high reached in January, with analysts attributing the stock bust to concerns about the firm's increasing reliance on its investment business.

Shares of chipmaker Samsung Electronics Co fell almost 2 percent, SK Hynix dropped 3.4 percent, while Japan's Capcom, which developed Tencent's blockbuster game Monster Hunter:World, fell 3 percent.

The decision has battered shares of market leaders like Tencent, which have plunged since the company was ordered to remove hit game "Monster Hunter: World" from sale only days after its debut.

In July previous year, China's communist party mouthpiece, the People's Daily, criticised Tencent, describing its "Honour of Kings" game as poison and called for tighter regulatory controls of online games. Tencent's hugely popular mobile game, Honor of Kings, also fell victim to regulations a year ago, over concerns that teens were spending too much time on it. The critics believed that the game is quite addictive, and hence, the company had to add in-game spending limits for underage account holders. The Japanese games industry has suffered too, with Capcom's shares dropping 2.7 percent and Konami falling 4.2 in the wake of the freeze being reported.

"For new game approvals, there will continue to be a drag", said Ms Alicia Yap, Citigroup Global Markets's head of pan-Asia Internet research.

Talking about Tencent, it seems to be that Tencent is already going to a rough patch and now this seems to have stirred a lot of tension for them. For China, Tencent and developer Bluehole substitute slime-green splatterings for oozing red blood so the game appears more like monsters fighting than people killing each other.

However, operating profit for Tencent's second quarter dropped by 3 percent year-on-year to 21.8 billion yuan (~$3.14 billion), but for the six month period this increased by 25 percent to 52.5 billion yuan (~$7.57 billion).

Back in 2009, World of Warcraft: Wrath of the Lich King was also banned for the portrayal of skeletons, but after making a few changes the game was back on the platform. Tencent started selling PC and stand-alone games just a year ago.

Alibaba Group Holding, which competes with Tencent across a number of businesses, is the parent company of the Post.

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