Comprehensive 3,500+ word report regarding new regulations governing Mobile Games in China and how this will affect domestic and foreign games companies. Suggestions for foreign game companies included below.
It’s time to talk about China again. A number of changes have taken place recently which will have huge effects on the Mobile & Online games industry. To be more specific, new regulations have been put in place that show China is getting extremely strict when it comes to the administration and approval of games in China. In China there are a number of Regulators and Ministries that are responsible for ensuring that Chinese values & laws are being promoted and upheld in the country. Or to put it simply, they’re responsible for censoring and regulating content in China. It’s no secret that China and censorship go hand in hand like… well… China & Censorship.
First there is the SAPPRFT (The State Administration of Press, Publication, Radio, Film & Television), this body regulate media in the country and are responsible for censoring anything that comes under the segments listed above. Secondly there is the CAC (The Cyberspace administration of China), they are the agency responsible for censorship and control over China’s Internet. Finally there is the MOC (Ministry of Culture), this ministry is responsible for culture policy in the country and promoting, protecting and censoring any form of cultural art.
Mobile Game Regulations
The big change that many of you may have heard about is that the SAPPRFT have introduced a new regulation that states every single mobile game must now be approved, prior to appearing on the Android and iOS app store. The regulation, which went in to place on July 1st, will have a huge impact on the gaming landscape in China and could ultimately have huge consequences. China’s Mobile Game market is currently the biggest in the world with over 400 million gamers and around $7 billion generated from Mobile games in 2015. There is also a fairly diverse portfolio of games and publishers with Tencent & Netease at the top, many companies in the middle and then a whole load of Indie developers who are also able to create mobile games and publish them on an app store. There are even popular foreign games on sale in China, such as Clash of Clans and others, and they have seen good levels of success.
With this new regulation, everything gets thrown out the window and now all new games will need to have Government approval before being added to an app store. But that’s not all, even games that were made before July 1st need to get approval from the Government before October 1st 2016 or they can risk their games being taken down. In other words, the whole situation is about to get a lot more messy. Lets take a look at these regulations in a bit more detail.
- A developer will need to apply for either the simplified process or standard process
SAPPRFT have introduced a simplified policy for Mobile games that meet a certain set of requirements.
- Game copyright must be owned by domestic (Chinese) individual or entity
- Do not contain sensitive gameplay elements regarding politics, military, nationaility or religion
- Have no storyline or very simple storyline
- Are casual games like endless runners etc…
If the above applies to your game then you’re in luck and can start the simplified process outlined below. If not, then you need to follow the standard process.
- Simplified process
The simplified process is far from simple and is quite absurd in many ways. In order to get your game approved you will need to submit your game to be approved at least 20 days prior from launch. The process involves filling out a bunch of paperwork, loading your game onto a smartphone with an active sim card and data plan, and sending it all to the SAPPRFT. Yup, you actually have to send a smartphone to them with the game pre-installed, in fact you have to send two smartphones if you plan to launch on both iOS and Android. It will then take an additional 5 working days for the auditor at the regional office to assess the game. Should everything be in order the auditor will then send a written letter of recommendation to the national SAPPRFT office who will make a final approval, this could take up to an additional 10 working days. Once the game is approved by the national office the regional office will then have 3 working days to inform the developer of the approval. (Sounds very not efficient)
Once that is done you can launch your game, but it’s not over yet. Within 7 days of the game launch you have to contact SAPPRFT again to report details on the launch of the game, such as the launch date, which app stores it is on and other details. Also, if you don’t launch the game within 20 days of approval then you also have to contact SAPPRFT in order to let them know why.
- Standard process
The standard process is for when point 1 does not apply to your game, and seeing as lots of games aren’t just endless runners or match-3 games with no story, a whole lot of games will fall under the standard process. In fact most games will fall under the standard process. The standard process is very similar to the simplified process where you have to fill out forms and send in phones with the app pre loaded etc… but there is one very important and significant change, the approval time. It can now take up to 3 months for these games to be approved. But I wouldn’t be surprised if it could take longer, especially for smaller games. In 2015 there were over 10,000 mobile games released in China. That’s around 27 games each day. I have no idea how they expect to approve all these games in such a short time.
Impact on domestic companies
There is no escaping these new regulations and every single game now needs to go through this process. With thousands of games being submitted to app stores each month it really makes me question how SAPPRFT will keep up with the games approval process. Do they have millions of employees just playing games all day? Also how strict will this approval process be? China is known for censoring the smallest of things and to date mobile games have not been subject to anything like this before. Will we suddenly see popular games being rejected on the basis of something silly? There is way too much uncertainty around this regulation at the moment and its not hard to see why some are worried when you look at the list of game requirements below.
All Online games must not have-
- Anything that violates China’s constitution
- Anything that threatens China’s national unity, sovereignty, or territorial integrity.
- Anything that harms the nation’s reputation, security, or interests.
- Anything that instigates racial/ethnic hatred, or harms ethnic traditions and cultures.
- Anything that violates China’s policy on religion by promoting cults or superstitions.
- Anything that promotes or incites obscenity, drug use, violence, or gambling.
- Anything that harms public ethics or China’s culture and traditions.
- Anything that insults, slanders, or violates the rights of others.
- Other content that violates the law
So with this in mind, we could start to see China’s government start to block foreign games, that previously wouldn’t have been blocked, as well as other domestic games that they just don’t feel like approving due to one of the silly reasons above. But that’s not the only worry here, just going through this approval process will take lots of time and lots of money. That’s something that a lot of small and mid size mobile developers just do not have and many analysts and internet commentators are already predicting that this could have dire consequences for smaller mobile developers in China. It’s no secret that the conditions are already tough for small developers in China, due to the utter domination of large mobile publishers, and this could be the final nail in the coffin. Spending all your time developing a game and then having to spend a ridiculous amount of money and time to get it approved, only to have the government reject it, is not something anyone wants to have happen and in most cases will leave small developers with no source of income to start a new project.
It’s estimated that it could cost anywhere between $3,000 to $6,000 for small developers to work with a publishing partner to get a single game approved in China. The reality is that not everyone can afford that, especially that one guy with the next genius mobile game idea who wants to put it on the app store himself. Indie devs may end up abandoning their plans to create mobile games if this becomes too costly or too risky of a proposition. For big mobile publishers this will be a barrier for them but one that they’ll be able to overcome in time. Especially if they start flashing money…. In the end it means the big get bigger whilst the small devs feel the brunt of this regulation.
This isn’t the only regulation that has been put into place. The CAC recently put out a new set of rules that need to be implemented on August 1st. Mobile App developers will now have to follow a strict set of rules that will give the CAC access to users personal information. Mobile app developers have been mandated to collect real name information of users using their apps through mobile phone numbers or other registration methods. They are also being told to implement inspection and management systems in their apps to stop the spread of illegal content or any content that goes against China’s culture. The app providers need to keep user records for at least 60 days at a time and report any illegal or suspicious activity to the CAC. In other words, mobile app providers are now being asked to monitor users of their apps and police them if they do something ‘wrong’.
All of this is being done so that China’s government can control and regulate the fast growing Mobile Games/App industry. No doubt there are financial reasons behind it, as well as the obvious censorship and control of mass media.
Impact on Foreign Games Companies
This whole time I’ve been talking about how this will affect China and domestic companies in China, but this has huge implications for foreign game companies as well. China have been sending a strong message to foreign companies that China is becoming more restrictive on foreign content and games being distributed in China. It wasn’t too long ago that China’s game market was completely dominated by domestic games only. The big video game publishers never bothered with localising their console games in China due to the console ban, PC game publishers never bothered unless they had an online game that would appeal to Chinese users, and mobile game publishers never bothered until the mobile game market started to explode.
Now consoles are unbanned and PC’s are more abundant, so this has caused many big gaming companies to take China seriously and publish console and offline PC games in the country. The Online gaming market has exploded in China and is very lucrative with games like Warcraft & League of Legends finding success. More recently we’ve seen games as a service take off in China and so many like Activision Blizzard have found success in China through publishing localised versions of Call of Duty Online and Overwatch as examples. China also has the largest mobile games market in the world and many western brands such as Angry Birds, Clash of Clans and Plants Vs Zombies have become household names in China due to successful launches of these games. It’s clear that China cannot be ignored by those in the West any longer as there is a huge opportunity here.
As noted, this will have big consequences on foreign developers who want to publish their games in China. Previously there were certain loopholes that would allow you to publish your game on iOS without having to follow any Chinese Government regulations. Now that loophole may be closed, in fact it already is for Chinese devs. Right now foreign devs are unaffected and can still publish apps in China on the Chinese Apple App Store via iTunes connect. But should the government decide to make the July 1st regulation applicable to foreign game developers it will mean that every foreign game will need to be approved by the Chinese Government before it goes on sale/app store. Anyone who has already tried to launch their game in China on Android will know that it’s near impossible to do so without a Chinese publishing partner. The reason for this is because Google Play is not widely used in China, instead there are a number of different Android App stores from various Chinese companies, each with varying market share. Therefore a Chinese publisher is needed in order for your game to reach these app stores.
Publishing games on Android, PC or console already requires a Chinese publishing partner and they could also be required to launch foreign iOS games as well if China are strict about this new regulation, thus closing the loophole. I will make clear that the loophole has only been closed for Chinese developers and not for foreign developers just yet. Launching games on any other platform for now will require a Chinese publishing partner who will be responsible for every single aspect of your game in China. From creating a localised version of the game that works with Chinese payment methods, to acquiring users, to promoting the game, to getting the game approved by the Chinese government.
Finding the right publishing partner can be tough due to cultural differences. It will take time and you’ll have to work out the right set up for your game (what you do and what they do) and you need to be ready to fully commit to this as you’ll be working with them throughout the lifetime of the game/games you’ll be offering. But this isn’t even the worst thing now. You may find a great publisher to work with but with these new rules in place they may not be able to get approval for your game if it breaks any rules that China do not like. You’ve already seen the list of rules above, they’re basically a list of “China can do what we want rules” and if they’re strictly enforced then it could mean that a lot of foreign games will no longer be accepted by the Chinese government to launch on Chinese app stores. What’s even worse is that the Government can start to blacklist publishers at any time for games or apps that go against Chinese cultural values.
Now more than ever, foreign game developers will need to be prepared when it comes to launching a game in China. You will really need to consider what sort of game you’re making and whether it will fit in with the Chinese censors.
So if you’re going to be developing a Grand Theft Auto style game then it’s very clearly going to be rejected by the Chinese government and it’s honestly not even worth the time to try and get it accepted. If you know your game vision is going to be against the values above then just focus on other markets. If you believe that your games fit with the values listed above then the next thing to consider is the business model for the game in China. On Mobile the best model to use is without a doubt the F2P model, that also applies to online PC games where the abundance of internet cafes has meant that online f2p client games have become the most popular style of games. The Paid game model can still work but this would mostly apply to console games for PS4 & XB1. If you’re thinking of launching a paid PC game then its best to talk to your publisher about that, I’d recommend just going through Steam and localising into Simplified Chinese. Steam is popular enough in China and with the right promotion a paid game can do well in China through that medium.
When working with a Chinese publisher, the topic of localisation will be key. A high quality localisation can favourably impact sales of a game in China and its likely the Chinese publisher will want to do this themselves. As noted above, the Chinese publisher role is quite big these days and so it’s important to really negotiate well and make sure that there are clearly defined roles for both yourselves and the Chinese publisher. It’s important to work out what suggestions you should listen to and what suggestions you should dismiss. It’s also important to protect your game on a technical level by implementing measures that can protect the game source code. It’s best to sign a formal agreement with your Chinese publisher that outlines how the game is to be localised and how the game source code is to be used to avoid the Chinese publisher doing something against your wishes.
It’s also best to trademark the game name, art assets and key characters/mechanics as quickly as possible to avoid another Chinese company from trying to create a rip off game under the same name. Usually trademarks are served on a first come first serve basis which can be terrible for you if you wait till the last minute to do this. In addition, you will need to obtain a ‘game source code copyright registration certificate’ from the Chinese Government to ensure that you are the owner of the source code in China and so the Chinese publisher can license it. This makes it less likely for your game to be copied in China and also speeds up legal court proceedings if they need to take place.
In the end it all comes back to one point. Does the game meet the censorship requirements in order to go on sale. If the answer is yes then it won’t be hard for the Chinese publisher to obtain approval for your game. It is important that all licenses and approvals are obtained prior to the game launching on Mobile, otherwise you could face harsh consequences from the Chinese government who will not hesitate to shut down the game. China wants to control the media that citizens consume and they also want citizens to favour Chinese companies. So it is very difficult for foreign companies to enter. It is imperative that all policies, regulations and laws are followed to ensure that your game can launch with no issues. The payoff can be great if the game does well there. You know you’re doing well when China is one of the top 3 countries for your app.
To sum up.
- Decide if your game is right for China and will work with current censorship policies
- Find a trusted Chinese publisher to work with
- Outline a game licensing agreement with them (Strict localisation rules)
- Register IP trademarks and copyrights
- Make sure all Governmental approvals are in place before launching
- Monitor game success regularly and adapt to trends
However, recently Steam has been getting a bit too much attention and some streaming sites have started blocking lifestreams of banned games like GTA V. Also, AliPay recently withdrew support as a payment solution on Steam for unknown reasons. Now it could just be a coincidence that these two things happened but I’m fairly sure that Steam will be next on the censor/ban list. China have done it before with Facebook for example, which is blocked in China and I have no reason to believe they won’t do it again with Steam. It’s not a case of if, in my opinion, it’s a case of when.
It’s clear that these new regulations will have an impact on Chinese developers. With every game needing approval it means that small publishers need to invest more time and money in submitting games to the government for approval and waiting up to 3 months or more for the game to be approved. It has the danger of putting smaller companies out of business and also radically changing the pace of the mobile game market in China. For big companies it will likely be business as usual though as they can adapt to this in an instance and will no doubt have preferential treatment.
For foreign companies this could close the loophole on iOS and require that all foreign companies work with a Chinese publisher to bring games in. It also means that it will take a long time for games to be approved and that’s assuming they’re even approved in the first place. The government can easily demand changes before a game goes on sale or outright ban a game and blacklist the developer. Approval before launch now applies to console, PC and mobile games.
An update to this article is now available to read here- UPDATE