1、Analyzing the Consumer and Market Impacts of Chinese Games Market PoliciesNovember 2022 Newzoo 2022The regulations come at a time when Chinasgamesmarketthelargestintheworldbyspendingandplayernumbersisreachingunprecedentedheights.China-basedgamecompanies have grown to be among the largest inthe world

2、 and are brimming with talent.Prompted by regulations in their home market,these companies have invested in(and expandedinto),with notable successfromsandsMeanwhile,non-local game companies are hopingto tap into Chinas massive games market but arestrugglingwiththeunpredictableregulatoryenvironment.I

3、n this report,we summarize the regulations fromthepastdecade,highlightkeylearningsfromChina-basedcompaniesinternationalstrategies,andidentifyopportunitiesforinternationalcompanies looking to enter China.AlthoughyounggenerationsinChinatypicallyenjoy and accept gaming,the media,government,and older ge

4、nerationsespecially parentsoftenlabel games asthat negativelyinfluencesyoungpeople.InAugust2021,theChinese government released strict regulations tolimit play time for gamers under 18 years old,aiming to.These 2021 regulations were the latest in a long listof governmental efforts to controland.Howev

5、er,theinconsistentimplementationandenforcement of many policies have left Chinasgames market in a state of.Manyregulationsarenotstandardized.Othersareimplementeddifferentlyfromtheirinitialannouncements,leadingtosubjectivedecision-makingbyenforcers.Localinterpretationsofregulations can also differ.,w

6、heremanygamesoperatewithoutofficial licenses.China remains the worlds biggest games market by revenues and players in 2022,but regulatory challenges remain 2of 2022s global games market revenues will come from China.China Market Analyst Mobile Market Lead Lead Analyst Games Market Analyst&Writer Edi

7、tor in Chief Lead Visual DesignerSource:Newzoo|Global Games Market Report|November 2022Timeline&Key Developments5Regulations on Minor Protection6Regulations on Game Licenses9Unregulated Areas Across Mobile,Console,PC,and More12Regulations on Live Streaming16Compliance and Self-Regulation 20Live Game

8、 Strategy21Overseas Expansion22Overview of Approved Imported Games in China25Opportunities for International Developers26 Newzoo 2022Timeline,key developments,and unregulated areas across platforms Newzoo 2022Since the early 2000s,the Chinese government introduced increasingly strict regulations to

9、control Chinas games market5Due to organizational restructures,the Chinese government from March to December 2018.The government introduced the first official rule for online games,requiring to acquire licenses to operate.Since 2000,the fast-growing games market drew the Chinese governments attentio

10、n to potential negative influences of gaming addiction among young people in China.In 2000,the government in China.In 2002,it requested that(at the time PC)before publishing.From 2005 to 2007,the government asked large game companies to develop an to minimize play time for minors under 18 years old.

11、Due to technical challenges,companies failed to fully implement these systems.Following the significant growth of mobile gaming,Chinas government required to be approved before publishing.A nine-month started in July 2021,reportedly to further restrict the game approval processThe maximum in-game sp

12、ending for minors from 8-16 years old and 16-18 years old was set to and,respectively.Online game companies can only allow minors under 18s to access games.The government on game consoles.Through partnerships,and could release special versions of game consoles in China.Minors(under 18s)were as in-ga

13、me rewards were reduced by 50%after three hours of play.Rewards were removed after five hours of play.The penalty period reset after five hours of no play time.Previously,publishers launched their games via betas to bypass regulations.In 2011,online games were with in-game purchases before attaining

14、 a license.Both PC and mobile game players are required to register with their real-name identifications for the.Game LicensesMinor ProtectionGeneralBefore 2000192014The government developed an for game companies to verify player identities.201220132016Minor players under 18swe

15、re allowed to play a maximum of and.Newzoo 2022Anti-addiction draws high attention from regulators;minor protection is the key regulation focus in China.Newzoo 2022China now officially covers game anti-addiction regulations in its newly revised minor protection law7s Chinese website shows the CADPA

16、rating icon at the left cornerGame companies can only provide game services to minors under18 years old between 8 PM and 9 PM on Fridays,Saturdays,Sundays,andholidays.The maximum monthly in-game spending for minors from 8-16years old is CNY200($30)and CNY400($60)for 16-18 years old.All game companie

17、s are required to integrate a real-name verification system into their game anti-addiction system.Live-streaming platforms must feature a special“YouthMode”to protect minors from game addiction and inappropriate content.Minors under 18 years old are not allowed to spend money on streamingplatforms.I

18、f they do,platforms must refund the money to their guardians.Minorsagedbetween16and18canstreamundertheirguardianssupervision.Read more about live-streaming regulations on page 16.Professional players under 18 years old are not allowed to competein any official tournaments.Platforms that rent or trad

19、e game accountsare banned from providing their services to minors under 18 years old.In 2020,the China Audio-Video and Digital Publishing Association(CADPA)released an age rating guideline for games published in China.The CADPA ratingsystem(8+,12+,16+)in China only serves as afor minors and theirgua

20、rdians.Earlier government announcements suggest the age rating system isbased on categories including,and.The CADPA rating system was treated as a pilot test.Now,publishers must.TheCADPA rating icon must also be present on the game download/purchase pageand in all game promotional materials.Source:L

21、eague of Legends:Wild Rift Newzoo 2022The anti-addiction regulations onlyin China inthe short term.Reportedly,the share of minor spending is small(below 2%in 2021).Thetable on the right summarizes the reported minor spending shares from leading publicgame companies in China.When they are unable to p

22、lay,some minors likely turn to watchingto stay engaged with their favorite games.Following the regulations,several(especially for)to make sure all the players were above 18 years old.The regulations on minors mean gaming mayin China,negatively impacting the Chinese gaming market in the future.may al

23、so be affected implicitly due to fewer players being engaged(meaning lower player bases).and platforms will bear the costs of anti-addiction measures andmight even,ultimately leading to fewer resources forcontent and therefore less opportunity for players to engage.may be less willing to invest in C

24、hinas games industry,seeing it as risky.China may becomewith a limited esports talentpool,potentially leading toin the long run.However,the regulations are likely to cause negative effect in a longer term820206%from players under 183.2%from players under 162020 Annual Report20211.5%2021 Annual Repor

25、tH1 20211%Q2 2021 Investor CallH1 2021Around 1%Q2 2021 Investor CallH1 20210.009%(Shengqu Games only,a company under Century Huatong)Shengqu Games Weibo Account20210.025%2021 Annual ReportH1 20220.0029%2022 Interim Report20210.055%from players under 180.016%from players under 162021 Interim ReportSo

26、urce:Public FinancialsAmong Leading Chinese Public Game Companies Newzoo 2022The game approval process in China is challenging,time-consuming,and highly uncertain.Newzoo 2022A lack of regulatory clarity makes publishing and operating games difficult in China10When applying for game licenses,game com

27、panies needed to filethat includedinformation about the publishers,game screenshots,all game scripts,real-name verification systems,a list ofprohibited words in the game,etc.Notably,.For example,with monthly updates,added more than 90,000 characters to its list of prohibited words.In April 2021,Chin

28、a updated therating system for its game approval process.The new rating system covers five categories:Whether the game matches the governments societal values,worldview,and view ofhistory.Encourages games to use innovative game design.This rule prohibits games that blatantlycopy existing titles.Refe

29、rs to a games quality and artistry.Whether the game can educate players on Chinese culture and scientific knowledge.Anymistakes or errors in the text or graphics will lead to points deducted.Whether the game is a complete package and can run smoothly.At least two experts evaluate each game based on

30、the above categories.Each category gets a score between 0and 5;the games overall score is the average of the five categories.The scoring will be rounded to+/-0.5 basedon a general review,soIn other words,only games with an average score of 3 or above will be approved.For example,Fate/Grand Order(a p

31、opular card battler game)was required to change thenames of in-game characters based on Chinese history/literature in order to reduce the connections betweengame characters and Chinese history/literature.For game companies that publish games without game licenses,or that use other games licenses,the

32、 governmentis entitled toand finethe game companys operating revenues.Due to regulation pressure,renamedto,changing the game settingfrom a warzone to a military training exercise.The gameremoved blood,instead giving players four different smokecolors to choose.had to postpone a new character cosmeti

33、c,because the character rode a motorcycle in a dangerous way(apotentialbadinfluence)onteenagers.Later,Tencentupdated the skin with helmet and vehicle registration plate.Source:Honor of Kings;Peacekeeper Elite Newzoo 2022Many game companies reportedly laid off or dissolved their gaming departments201

34、7200212022Imported GamesDomestic Games11Mobile Game Licenses in 2021PC Game Licenses in 2021Console Game Licenses in 2021Before thein 2018,the gameapprovalprocesswasrelativelyfastandeasy.Following the nine-month license freeze ending inDecember2018,gameapprovalshavebecomesignificantly str

35、icter in China.Duringfrom August2021 to March 2022,there were reportedlyin H2 2021.As of September2022,the game approval process still has not fullyrecovered.Notably,at the time of writing,signaling that the situation isgettingmorechallengingforforeigncompanieslooking to enter Chinas games market.On

36、 top ofacquiring a game license,foreign companies mustpartner with a Chinese entity to launch and operatetheir games.By 2022,China may start tothe approvalprocess from the central government to several(includingand).Thiswill potentiallyasmore people can contribute to the process.Notably,alicense obt

37、ained in a Free Trade Zone is applicableacross the country.Source:National Press and Publication Administration(NPPA)By National Press and Publication Administration(NPPA)|*As of October 2022 Note:The per platform game license analysis for 2021(right)doesnt add up to the total game numbers(left)beca

38、use a cross/multi-platform game in China only receives one license while it is counted double in the per platform analysis.We do not deduct the licenses that were revoked by NPPA.Newzoo 2022Chinas players and publishers are continuing to find workarounds for the strict regulatory environment,but the

39、re are risks.Newzoo 2022Many unapproved games are still available via Steam,VR,and cloud platforms 13Source:Steam Hardware&Software SurveyDuring the period from August 2017 to April 2018,Valvediscovered that users frombecamemore prominent in the Steam Hardware Survey.The main driver for the sudden i

40、ncrease in cyber cafusers here was the massive success ofin China atlaunchonSteam.Duetotheto play PUBG,many Chinese players choseto access the game via cyber cafs.Five years after PUBGs global launch,.Despite lacking the license to operate,at the time of writing(October 2022).Most Chinese players us

41、e a(a service that provides stable and fastinternet connections for Chinese players to access games on international servers)orfor asmoother gaming experience.Steam also allows players to pay in CNY via online payment servicesincludingand.Players in China can also access many unapproved Steam games

42、viaand.Faced with tightening regulations in the domestic market,Chinese game studios(including small-to-medium ones)choose to publishon Steam first before acquiring gamelicenses.For example,sold 2 million copies one year after its early access release.However,in September 2021,213 Chinese game compa

43、nies establishedlike Steam.It may becomedifficult for games published on Steam to acquire game licenses.Steam titles likeandachieved massive success in China.One of the advantagesthese games have for the Chinese market is that they.:,partnering with,officially launchedin February 2021.On the launch

44、day,the platform only provided 53 titlesand without community features.The releaseof Steam China provoked around a potentialin the future.At the end of 2021,Chinaunofficiallybanned Steam for around a month,when manyplayers were unable to access Steams store.The connection to Steam is often unstable

45、in China.,one of the most used game accelerators in China to accessSteam,announced it would cancel its service in May 2022.However,other popular game acceleratorssuch as,still work.Newzoo 2022Wild RiftRevelationDevil May Cry:Peak of CombatBattle of Golden SpatulaDoula Continent:Awakening SoulYi Nian

46、 Xiao YaoMoles WorldEndless NotesTower of FantasyHarry Potter:Magic AwakenedKomori LifeStacky DashOne Piece Fighting PathWang Lanmeis Happy LifeDoula Continent:Soul Master DuelChimera LandJade MasterBall Run 2048Paper BrideLandlord SimulatorGiant Rush!Ace RacerMARVEL Super WarYu-Gi-Oh!DUEL LINKSOnly

47、 premium mobile games or games featuring in-app purchases(IAPs)require approval games without licenses(IAA)games with licenses(IAP or hybrid)Allmobile games or gamesfeaturingmustobtain a game license before publishing.However,games that monetizeonlyviaads,accordingtocurrentregulations.Monetizing sol

48、ely via ads is just one way to circumventregulatory requirements.As there are thousands ofmobile games available on the market,regulators mayoverlook.Some apps label themselves as“entertainment”apps(instead of“games”)to bypass regulations.In June 2022,Chinasfined three IAA games for not having game

49、licenses forthe first time.Regulators confiscated all game revenuesand removed games from the app stores.It signals.Among Top 100 Titles in China by Downloads|iOS|202114Amongthetop100mobile games in Chinaby downloads in 2021,24werereleasedin2021.Amongthe24newmobile titles,seven werepublished without

50、 gamelicenses.These six gamesonlygeneraterevenuesfrom in-game ads.Source:National Press and Publication Administration(NPPA);Airnow Data Newzoo 2022Most console players in China buy overseas consoles(rather than the official Chinese ones)019BestTVOriental Pearl GroupTencentXbox Live Gold(

51、CN Version)PlayStation Plus(CN Version)N/A123032Through the,Sonysupportslocal game developers in Chinato build games on PlayStation.Some notable examples includeand.AlthoughtheChinaHeroProjecthasdrawnmuchattentionamongChineseconsoledevelopers,manygames must go through ato get approvedby Chinese regu

52、lators.In 2014,the Chinese government.Since then,console manufacturers can officially produce and sell gameconsolesas well as console gamesin China via creating awith Chinese companies.Due to the countrys strict approval process,only a few games areavailable on the official Chinese versions of conso

53、les.Therefore,it is verycommon for players to purchase games and consoles from Japan or HongKong via the(e.g.,e-commerce platforms such as Taobao andJD.com).To reach more games and services,players who purchased the officialChinese versions of consoles have also found various ways toto access the gl

54、obal market.Chinahascrackeddownonunapprovedgames/consoles imported from other markets for years.Now,it is gettingmore and more difficult to buy consoles and boxed games on thesecondary and grey market.China may ban theon game consoles.Thecurrent backdoors on the Chinese versions of consoles still al

55、low players toaccess international servers and download unapproved games.Earlier in2020,was forced to disable the backdoor on PlayStation 4,butplayers quickly discovered a new workaround.Xbox,PlayStation,and NintendoSource:Xbox;PlayStation;Switch;National Press and Publication Administration(NPPA)Ne

56、wzoo 2022Game live-streaming platforms face regulation pressure in China,but there are currently many workarounds.Newzoo 2022However,not all rules have been fully implemented by game live-streaming platforms17online TVbroadcasts,live-streaming services,short-video platforms,or any other audio-visual

57、 platform.Although this regulation is official,.The only games that live-streaming platforms have banned,as requested by thegovernment,areincluding,thefranchise,and others.Minors under 18 years old are(e.g.,via donations or subscriptions).Only.Streaming platforms must feature afor minors under 18 ye

58、ars oldto watch.The Youth Mode restricts inappropriate content,spending,andengagement with streamers and other viewers.It also limits the daily watchingtime to.Excess watch time requires guardian approval.Minors arenot allowed to use streaming platforms from.However,there ison steaming platformsas i

59、n online games,meaning that it is easy to bypass the regulations onstreaming platforms.one of the largest game live-streaming platforms inChina,has featured a Youth Mode since late 2019.Parents/guardians can set up the Youth Mode with apassword.This password is required to exit or bypass theYouth Mo

60、de(see below).Source:Huya231OncetheYouthModeisswitched on,the user mustenter the correct passwordtothe mode.If the user wishes to accessstreamingcontentfrom,the passwordis required.Under the Youth Mode,theuser is only allowed to spendwatching everyday.Once the time limit isreached,theappwillbelocked

61、 by the password.Newzoo 2022It is more challenging to regulate live-streaming platforms compared to online games 18Popular unapproved games(includingand)are still available on live-streaming platforms.Some streaming platforms renamed PUBG to a different category.There have been no further regulation

62、s since the first announcement.Nowadays,non-live-streaming clips and other edited videos are trending on video-sharingplatforms.Although games likeare banned from live streaming,itsIt seems that VOD content is not included in the regulations.Due to minor protection rules,streaming platforms mustany

63、spending by minorsunder 18.Streaming platforms and streamers have to bear extra costs during the refundprocess.is far more popular than gaming content on streaming platforms,soChinas regulators mainly targetsuch as pornography and violence.It is difficult to for streaming platforms to monitor stream

64、ing content when facingthousands of streamers at the same time.When streaming platforms try to hide populartitles,regulators may alsoeveryday.Moderatinganever-endinginfluxofcontentishugelychallenging,especially for those unfamiliar with gaming.As most streaming platforms are accessible via(instead o

65、f apps)without havingto log in,users can easily bypass the regulations.Whilehas not been officially approved in China,streamingplatforms still allow PUBG content due to its high popularity.Theseplatforms have renamed the game to bypass regulations.Because ofPUBGs slogan“WINNER!WINNER!CHICKEN DINNER!

66、”,“chickengame”often refers to PUBG in China.VOD platforms are still allowed to feature content from banned games.For example,s tutorials and streaming clips are still available on(below).12Source:Bilibili Newzoo 2022Strategies in the domestic market and overseas expansion Newzoo 2022Game companies

67、must bear extra costs created by the regulations,including content moderation20Tencent brands Roblox China more as an that helps children develop programing mindset and skillsets.In May 2019,announced a partnership with to launch Roblox China via a joint venture.By July 2020,the global version of Ro

68、blox was no longer available in China.In July 2021,Tencent officially launched Roblox China.was banned in China due to theprevalence of political UGC in the game.Game companies voluntarily promotelike traditional cultural heritage and medical technology.For example,atsannual game conference SPARK 20

69、22,the company announced its partnership with asubsidiary for a flight simulation system,powered by Tencents game technology.Larger game companies including,andarestarting to feature facial recognition technology to verify whether players are using their ownidentification.Tencent registered a patent

70、 allowing it to easily identify players by utilizingplayer location data.If a user is detected in a school area when logging in to a game,the user willbeaskedtoverifyhis/heridentity.Thislocation-basedverificationsystemimprovestheefficiencies for Tencents game anti-addiction measures.UGC-based games

71、likeandneed game contentto be reviewed(automatically via an algorithm or manually)for several rounds.statedthat the company planned to recruit 300-350 employees to review content by the end of 2022.Content moderation is always the priority for games like Roblox and Minecraft in China.There are admin

72、istration managers monitoring and browsing all streamers 24/7 toavoid inappropriate game/streaming content on their platforms.Source:Animal Crossing Newzoo 2022Publishers need just one license for multiplatform games,driving game companies to develop titles for various platforms21iOS|2021Due to the

73、limited number of new games approved in China,game companies choosetoand build them as.ChinesecompaniesareamarketleaderinF2P(mobile)games,intermsofdevelopment,monetization,and operation.The tightening local regulations are furtherfueling this trend.It is now very common for games to feature regular

74、updates,seasonpasses,time-limited PVP/PVE events,IP collaborations,and more.Long-term LiveOps leads to high retention and stable revenue streams from loyalplayers.Airnow data shows that 50%of Chinas top 50 grossing mobile games in 2021(iOS only,see right)were released prior to 2019,and 15 games have

75、 already operatedfor,includingbyandby.Mobile games in China are becoming,featuring advanced graphics andcomplex combinations of game mechanics.The game design is sophisticated enough tosupport a regular stream of new content.Technological advances in mobile game development makes it possible to laun

76、chgames across.Notably,gameswererequired to apply for a separategame license for each platform(e.g.,had to apply for three licenses foras a cross-platform game).However,China now allowsto meet the latest market trend.This also streamlines the approvalprocess.Multiplatform development is efficient in

77、 terms of adhering to the regulations.Source:Airnow Data;National Press and Publication Administration(NPPA)Before 2001920202021By National Press and Publication Administration(NPPA)1,3650001,308300679611 Newzoo 2022Genshin ImpactmiHoYo20204PUBG MOBILETencent20185Lords MobileIGG201639Stat

78、e of Survival:Zombie WarFunPlus201916Top War:Battle GameTopwar Studio201935Rise of KingdomsLilith Games201828Mobile Legends:Bang BangMoonton201654Project MakeoverMagic Tavern202029EvonyTop Games201643Mafia CityYotta Games201732China is hoping to conquer the global mobile market with diverse game the

79、mes and complex gameplay22Source:Game Publishers Association Publications Committee(GPC)of China;Airnow Data1920202021iOS&Google Play|Global Market Excl.China|20212018-2021 CAGR of Chinese game companies revenues outside of China.During the same period,the CAGR for global mobile game

80、revenues is,meaning.Chinasgamecompaniesaregradually leading the global mobilegames market.In the early years,Chinese companies mainly targetedthe Western market withor.Now,we are seeing more successfulChinesegamesacrossvarietyofgenres.Forexample,has innovated meta play inmatch-3tothenextlevel;open-w

81、orld mobile games such ashaveachievedmassivesuccess in both China and overseas.Moreover,Chinese developers haveaccumulatedrichexperienceinoperatingin the F2P eraand they are bringing this expertiseto the international market.Severalinternationalgamegiantshavepartnered with Chinese developersto trans

82、fer their game franchises tomobile,suchas(Tencent)and(NetEase).Newzoo 2022Chinas leading game companies are acquiring development talent and setting up overseas studios and publishing divisions23Besides growing their own games outside of their home market,China-based game companies arebyinvesting in

83、 game studios all over the world.Companies such as Tencent and NetEase have established game studiosin North America(e.g.,Los Angeles,Seattle,Montral)and Asia(e.g.,Tokyo,Singapore).Theirgoalistocreategamesdevelopedbyinternational teams likely to appeal to audiences in the global market.Duetocultural

84、differencesandlanguagebarriers,manyChinesecompanies struggled to publish games in the international market.Inaddition to establishing international development studios,now,Chinesecompanies are.Level Infinite(Tencent)and Farlight Games(Lilith Games)also publish games for othersmall-to-medium Chinese

85、game studios in the overseas market.2022Ubisoft300M9.99%Assassins CreedAdventure RPG2022From SoftwareN/A16.25%Elden Ring,Dark SoulsAction RPG2022TriternionN/AMinorityMordhauHack and Slash2022SyboN/AAcquisitionSubway SurfersArcade2022Tequila WorksN/AMajorityRimeAdventure Puzzle20221C EntertainmentN/A

86、AcquisitionKings BountyTurn-based RPG2022Inflexion GamesN/AAcquisitionNightingaleOpen-world Survival Craft2021Sumo Group$1.25BnAcquisitionGame Development2022Quantic DreamN/AAcquisitionDetroit:Become HumanInteractive Story2021Kepler$120BnMinoritySifuFighting2021Moonton$4BnAcquisitionMobile Legends:B

87、ang BangMOBA Newzoo 2022Challenge&opportunities Newzoo 2022Nevertheless,winning a niche market in China could lead to considerable revenue,thanks to the massive Chinese audience25Imported games approved by NPPA refer to.For example,Call of Duty:Mobile is developed by Tencent,but since its original I

88、P is foreign,the game still categories as an imported game.In order topublish games in China,international game developers must partner with a local publisher.Of the 76 approved imported games in 2021,55 are mobile titles,11 are PC titles(one alsohas a console game license as cross-platform),10 are

89、console games(see page 15).As Chinais a mobile-first market,it is not surprising that there are much more mobile gamesapproved by NPPA.There is much less room to bypass regulations with a mobile game than via grey marketslike PC/console games.The imported PC/console games approved mainly serve to ex

90、pandlike WeGame by Tencent orlike PlayStation and Switch.After one year of being approved,nearly.Two games that were published earlier(byandby)have already stopped operating due to poorperformance.,including the long-anticipated PC game.The biggest challenge for imported games is.Getting a game lice

91、nse is already a verytime-consuming process with high uncertainties.On top of that,games often need to testfor several rounds to ensure smooth operations,including adding localization features andreal-name verification system.Todays gamers demand engaging with their favorite gamesas soon as they are

92、 released.Therefore,with the time-consuming approval and localizationprocess,it is becoming increasingly.It is often more economical to launch internationalgames via Chinas grey market but may carry risks for games not being officially approved.By National Press and Publication Administration(NPPA)|

93、2021iOS&AndroidOnly AndroidNot ReleasedStop OperatingBy National Press and Publication Administration(NPPA)|2021PCPlayStation 4/5Nintendo SwitchNot ReleasedSource:National Press and Publication Administration(NPPA)*Including games approved on multiple platforms.Newzoo 2022Games based on popular PC/C

94、onsole franchises are more likely to succeed26Due to its massive user base and relatively low entry barrier for(domestic)developers(compared to other gaming platforms),Chinas mobile gaming market isamong the most competitive games markets in the world.To have a chance at making it to the top of the

95、grossing charts,.Particularly,game franchisessuch asandare popular in China,as game franchises canbring the core gameplay loop and game theme to players,whereas non-gameentertainment IPs need to build up an immersive experience for players from theground up.One successful non-game IP example isbyit

96、features high-fidelity graphics and storytelling videos to facilitate theIP adaptation.When the(game/entertainment)IP is well known in China,IP-based games often donot require muchand can easily break the culture barrierwithuniqueIPadvantage.Nevertheless,Westerncomicshaveneverbeenmainstreaming in Ch

97、ina;therefore,we see a relatively weaker performance of.For non-IP-based games developed by foreign game companies,existingandare unlikely to match perfectly to the preference of Chinese player,that,for example,much prefer anart style.For example,byachieved success in the casual genre in the interna

98、tional market but failed tosecure a similar position in China.is always a challenge in the highly competitive mobile market.Partnering with mobile publishers such asandmakes it easier forimported games to access players via localized advertisements,social media,andother marketing activities.However,

99、these top publishers will often ask for a largerrevenue cut.China|iOS|August 2022Diablo ImmortalNetEaseJuly 20223League of Legends:Wild RiftTencentOctober 202110League of Legends:Esports ManagerTencentJuly 20227Digimon:New CenturyTencentOctober 2021129Guardian TalesBilibiliApril 2021200+World Flippe

100、rG-bitsOctober 2021300+Might&Magic:Era of ChaosTencentJune 2017200+Pokmon QuestNetEaseMay 2021400+Marvel DuelNetEaseSeptember 2021500+Merge Dragons!MyGamezNovember 2021300+Source:National Press and Publication Administration(NPPA);Airnow Data;Qimai DataIP-based mobile games Newzoo 2022Video content

101、is one way to reach Chinese players,who often access unapproved games via workarounds27China has a large grey market for PC and console despite all regulations(read page 12-15to learn more).Therefore,every nichegaming marketcould potentiallygenerateconsiderable revenue via massive player numbers.Bes

102、ides,game companies can also reach out toon live-streaming/video-sharing platforms or among other online game forums to promote games in China.Among all game influencers in China,have always been considered as the mostimpactful ones,which is also one of the biggest drivers promoting unapproved games

103、 toChinese gamers.One success story is,allowing China to follow the battle royaletrend as the rest of the world(despite that PUBG still awaiting approval).Chinese viewers typically enjoy games where streamers can actively interact with otherstreamers or viewers.Games underare more likely to trend on

104、 streaming platform.These days,VOD platform(equivalent to YouTube in China)is getting increasinglypopular among gamers,attracting a massive amount of game content on the platform.Influencers have played an important role in introducing diverse game genres to Chineseplayers.Some notable examples incl

105、udeand.Despite many restrictions on the Chinese version of game consoles,Chinese players arestill motivated by word-of-mouth marketing as players in the rest of the world to accessunapproved games such as.displays a fewunapproved games on its Chinese website for promotion but stated“games are still

106、indevelopment;the official game release will be limited to Chinese regulations”.WhileenteringtheChinesemarketviaofficialwayshasmanychallengesanduncertainties,it may still be worth it for game companies to enter Chinas grey gamemarket by2017KraftonBattle Royale21.6M2017Bennett Foddy(Precision)Platfor

107、mer8.3M2018Sony(Interactive Story)Adventure15.0M2018InnerSloth(Social Deduction)Arcade14.5M2019Other Ocean Interactive(Social Deduction)Arcade12.7M2020Epic GamesBattle Royale4.9M2020CD ProjectAction Adventure10.8M2022BandaiAction RPG17.0M2022Digital Confectioners(Social Deduction)Arcade2.7MTop Viewe

108、d Video on Bilibili|As of September 2022Source:Bilibili Newzoo 2022Operating a game in Chinawhether officiallyor through the grey marketcomeswith acomplicated regulatory environment,and noneof the options guarantees the ability to operatein the future.The past years have shown thatregulationschange,

109、generallytowardsstrictness.In this report,we summarized and analyzedregulations and information disclosed to public,hopefullypresentingsomeinsightsforcompanies to have a better understanding ofthe Chinas current regulations.As regulationscan be consistently changing and sometimesunclear,peopleinthei

110、ndustryoftenhavedifferent interpretations to the regulations andrules.If you have any different opinion or thought,please feel free to reach out to us for futurediscussions.Sincethebeginningofthe21stcentury,theChinesegovernmenthasbeenregulatingitsgamesmarket,but this has not(and will not)stopChinese

111、 game enthusiasts from accessing thegames they want to play.Securingalicensetooperatethroughtheofficial approval process is the correct andsafestwaytoenterChinasgamemarket.However,as the process is time-consuming andhighlyuncertain,gamedevelopersandpublishers should also consider other options.When

112、it is difficult to acquire game licenses,is probably still the most feasible way forgame companies to bypass regulations and toreachChinashugeaudience.Besidesadvertisements,promotinggamesthroughplayer and streamer communities is an efficientand effective way to market a game in China.Notably,Chinasr

113、egulatorshavealreadynoticedseveralunregulated markets and workarounds.Regulations are unpredictable,but many companies are leveraging unregulated markets and workarounds28Source:Newzoo|Global Games Market Report|November 2022 Newzoo 2022Global,regional,market key metricsMarket sizing,trends,forecasts75,000 Gamers surveyed worldwideMotivations,drivers,playing behaviorGames&Market Engagement Data Covering Thousands of Games PC,Console,Mobile,Viewership,RedditPlayer Demographics&Psychographic DataTrends,Market Sizing,Forecast Data29