NetEase and Tencent finally get green light to release new games in China

On the evening of September 13, the Chinese National Press and Publication Administration announced a new batch of approval numbers authorizing the release of new online games in the country. The latest list, which includes a total of 73 games, finally includes titles developed by major game companies NetEase and Tencent.

An “Approval Number” is a license for publishing games in China, representing a legal document to protect the developer’s copyright, as well as an approval document for the game to be published online for the indoor market. The list of newly approved games this time includes NetEase“Allstar Streetball Party”. It’s the first time NetEase got such a number after approvals resumed in April this year. Touched by this news, NetEaseNasdaq shares rose before the market opened on Sept. 14 Eastern Time.

The “Health Defense” of Nanjing Wangdian Technology Co., Ltd. also approved. The company is 100% owned by a subsidiary of Tencent. The chairman of the game publishing company is Hou Xiaonan, chairman of Tencentit is Chinese literaturea company whose principal activity is the operation of an online literature platform, and vice president of the platform and content group of Tencent. The game was first released in May 2021 at the Tencent Annual gaming conference.

In addition, Shenzhen Zhongqingbaowang Network Technology’s “Xeno Command”, CMGE Technology’s “Rakshasa Street MOBILE” and XD Inc.’s “Jianghu Simulator” PC game have also been approved. According to CMGE Technology, the firm has obtained five approval numbers, and these games will be launched in the second half.

Many Chinese game companies recently announced their 2022 interim reports. TencentRevenue from the gaming business in the second quarter of this year was 42.5 billion yuan ($6.1 billion), down 1% year-on-year and 3% month-on-month. NetEaseThe growth rate of in the first half of the year remained stable, and the revenue growth rate of its gaming business in the first and second quarters both exceeded 15%. 37Games and Perfect World each reported growth in net profit attributable to their parent companies in the first half of the year, while the performance of G‑bits Network Technology and Zhejiang Century Huatong Group declined to varying degrees.

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According to game company performance in the first half, several game companies whose net income attributable to owners increased year-on-year said they relied primarily on “old” games to contribute to their performance, and the influence of homologation numbers has not been fully demonstrated.

It is worth mentioning that exploring foreign markets has become a new strategic choice for many Chinese game companies in recent years. In the first quarter of this year, NetEase CEO William Ding has set a goal of achieving a 40-50% overseas market share for his gaming business. According to the “January-June 2022 China Game Industry Report”, in the first half of 2022, overseas domestic game revenue recorded positive growth. From January to June, the actual revenue of Chinese-developed games in the overseas market was $8.989 billion, a year-on-year increase of 6.16 percent. In absolute terms, Tencent ranked first with 21.3 billion yuan in overseas revenue.

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