China has come a step closer to approving commercial licenses for new games. In the country's state media, the formation of the Online Games Ethics Committee (OGEC) was announced on Friday. This new oversight group has started to assess the appropriateness of game content that is coming onto the market. The OGEC started with a group of 20 unpublished products. China has not approved a new game for sale in China since March.
But while this is a step towards new games to earn money in China, the committee has not opened the floodgates. It did not approve of any of the 20 games it saw for sale. Instead, the OGEC rejected nine games, according to China Central Television (via South China Morning Post). The group asks the developers of the remaining eleven games to make content changes to their products.
The CCTV news is the first time China has revealed the existence of OGEC. And this report did not go into too much detail on how the organization works or why some games were rejected.
What's going on in China?
The Chinese gambling stalemate is the result of a bureaucratic restructuring within the Chinese government. It has postponed, dissolved or given new leadership to the committees that previously oversaw the approval process.
At the same time, the country's government has obviously been busy with the popularity of video games. It has previously mentioned concerns about addiction and inappropriate content. And while the country reveals little about the OGEC, the regulator seems to be gaining control of the government.
The regulatory impasse dampens the country's massive $ 38 billion video game business. Tencent, China's largest gaming publisher, has watched its stock value slacken. The share price reached a high of $ 61
However, if China restarts gambling despite a stringent regulatory process, Tencent should have an advantage. It is close to the government. Tencent even has access to China's national citizen database, which tracks and quantifies people's behavior on an individual level. When it's time to approve the games, Tencent could use that relationship to make sure she knows exactly what OGEC is looking for. These challenging circumstances should push even more foreign developers into the hands of Tencent for partnership agreements.