China ends 'green channel' game approvals amid ongoing licensing freeze

Regulators in China have ended a program that gave some game companies a way to have their games approved for launch in the country during its yet-ongoing freeze on issuing game licenses. 

According to Bloomberg, the temporary “green channel” that gave both Chinese and foreign developers a limited one-month period to launch and test a monetized game in the region has been fully closed, leaving game makers locked out of China until regulators pass reforms for the official approval process.

The act of releasing a game in China has always been a fairly complicated process, but the ongoing approval freeze has made it nigh impossible. Previously, publishers had to submit games to a months-long approval process so those titles could be evaluated for content prior to release. 

Since at least August, and as early as April according to some, the Chinese government has halted this process completely following the restructuring of the internal government office usually in charge of part of that process. However, those official channels have been fairly silent on the reason for the freeze or how long it is expected to last, spelling trouble for companies that rely on revenue from China’s massive mobile and online game market.

Problems with those official channels has emboldened a grey market for not-quite-illegal game publishing and purchasing efforts, notes Bloomberg. Some publishers are selling their own publishing licenses for as much as $72,000, according to a source speaking to publication. Players themselves, meanwhile, are turning to Steam to purchase and play new games during the approval freeze. While Valve does have a China-sanctioned version of Steam in the works, the grey-market userbase is getting games from servers outside of China, something that is not officially permitted. According to some sources, Steam has surpassed 30 million Chinese users as of this month. 

While analysts don’t see the freeze lasting too much longer, there’s been no official word yet on how long the freeze will last. According to a breakdown from Niko Partners, it cost companies like Tencent over $200 billion in market value since its start. The freeze hasn’t totally shut down growth in China’s game markets, however; Niko Partners also notes that companies have still been able to release games so long as they were approved prior to March 28, 2018, and Bloomberg’s sources say that ongoing monetization and updates for live games have helped many companies weather the storm.