In the first half of 2020, 22 thousand new gaming companies were registered in China

This is reported by the South China Mortning Post. According to their data, the number of companies with the word “game” in their name or description has increased by 9% this year (by 22 thousand). In total, 260 thousand such businesses are registered in the country.

At the same time, 2018-2019 years were unfavorable for the Chinese industry. Recall that in the spring of 2018, the country suspended the issuance of licenses to new games (they are also ratification numbers or ISBN). Games cannot be published in China without these licenses.

The issuance of licenses resumed only nine months later — in December 2018. But even in 2019, it did not reach the previous volumes. The fact is that the authorities have become much stricter about approving projects. About 100-150 titles receive permissions every month.

Due to the inability to release their own project and work in the current conditions, many companies could not work. In just two years, 28,000 gaming businesses were closed in China.

The current growth seems to compensate for this loss. But it is still difficult to explain it solely by “compensation”, since there have been no significant positive developments in licensing since January 2019. Obtaining ratification is still a complex and lengthy process. For example, in 2020, ISBN received less than 600 games.

Moreover, the situation has recently become worse. Until July of this year, no license was needed to be released in the Chinese App Store. The requirements related only to working with local Android app stores. However, now Apple also does not accept games without an ISBN for publication.

Liao Huhua, an analyst at Beijing-based Analysys International, attributes the growth in the number of gaming companies to the financial success of the niche. Despite the fact that there are not significantly more games on the market, revenue from Chinese players continues to grow. In other words, the gaming market earns more and more and therefore becomes more attractive, despite the growing entry threshold.

For understanding:

• in the first quarter of 2020, the revenue of the Chinese video game market amounted to ¥73.2 billion ($10.3 billion), which is 25% more than a year earlier;
• There are 720 million players across all platforms in China.

Liao also shares an important nuance concerning new gaming companies. According to him, most of them (up to 90-95%) are not about development or publication: these are businesses that want to indirectly earn money from games as third-party services.

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• Game consoles of leading companies can be assembled in labor camps
• Is there any news?