China has ordered a stay on issuing new licenses to South Korean games, effectively blocking the release of any new South Korea-developed games in China.
Releasing a game in China as a non-Chinese developer was already a complicated ordeal that required compliance with a number of government-imposed restrictions and a complex licensing process, but publishing in the country is now a seemingly impossible feat for South Korea-based game developers as the Chinese government has instituted a full ban on the release of new South Korea-developed video games.
While games already released in China are unaffected by the action, the ban halts the licensing of yet-unreleased games of a South Korean origin and effectively cuts the country off from one of the largest mobile game markets in the world.
Pocket Gamer reports that the ban is likely in response to a Terminal High Altitude Area Defense (THADD) missile defense system being built in South Korea to protect against potential attacks from North Korea. China, however, sees the missile system, which is being built in partnership with the United States, as a direct security threat.
Companies who have already invested time into developing a game for release in China but who have not yet had it approved for release are likely to feel the effects of this ban first. It has seemingly already impacted one major South Korean developer, Nexon, who saw a seven percent drop in stock price shortly after China announced the licensing freeze. Nexon alone receives roughly 40 percent of its revenue from Chinese players, according to Pocket Gamer.
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