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Friday, January 25, 2019, 14:31
Tencent scores game approvals in China after months-long freeze
By Bloomberg
Friday, January 25, 2019, 14:31 By Bloomberg

This photo taken on Jan 14, 2013 shows the headquarters of Tencent in Shenzhen, south China's Guangdong Province. (PHOTO / XINHUA)

Tencent Holdings Ltd and Netease Inc got several of their less-important titles approved in China, as the world’s largest gaming market recovers from a months-long shutout that had thrown the industry into disarray.

READ MORE: Tencent to release Game of Thrones mobile game in China

Its shares climbed as much as 2.7 percent on hopes it may eventually get the green-light to make money off two of its biggest titles: PlayerUnknown’s Battlegrounds and Fortnite

Tencent’s Wood Joints and Folding Fan secured operational licenses on Jan 13, its first games to win approval since regulators resumed doling them out in December. Its shares climbed as much as 2.7 percent on hopes the social media and entertainment giant may eventually get the green-light to make money off two of its biggest titles: PlayerUnknown’s Battlegrounds and Fortnite.

China’s gaming industry, which generates more than US$30 billion of revenue, was hammered in 2018 after regulators froze approvals for new games, preventing companies from making money off their hits. That spurred Tencent’s first profit drop in at least a decade and helped wipe about US$200 billion off its market value at one point. Regulators are now working through a backlog of thousands of games that accumulated as a result -- more than 350 have been cleared since December.

ALSO READ: Tencent drops after pulling newly released PC game

“Although the news flow on game approvals remains positive, we view the most important games in the pipeline are PUBG and Fortnite,” Mizuho analysts led by James Lee wrote. “These games are likely in the back of the queue due to political tension with Korea and the US.”

The suspension stemmed from Beijing’s campaign to combat gaming addiction and a reshuffle of regulators, casting uncertainty over Tencent’s main business. Tencent’s and Netease’s games were part of the latest batch of 95 approved on Jan 13, according to a notice posted by the State Administration of Press, Publication, Radio, Film and Television.

 


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