China has froze all licenses for South Korean developers or have been made in South Korea to be published in China. This move comes from the back of the South Korean defense system receiving their new toy, the THAAD missile. (To know more about the THAAD Missile check out the CNN news report here)
The THAAD missile was built in partnership with the US, to help protect them from threats by North Korea. China did’t take this news very lightly as they feel threatened with South Koreans new apparatus and looks to tighten up their own security.
As part of the procedure, China has frozen all South Korean company games or developed in South Korean games to be released in the Chinese market, with the exception that currently published South Korean games may still operate as usual. There is no news on when this ban will be lifted but this news has already affected larger game companies stock as Nexon has seen a drop in stock price by 7%.
China Mobile Regulation
China has been regulating entry for foreign companies to enter the China market regularly and for quite some time now. Already existing in the PC platform, last year China has made it a prerequisite for any foreign company to partner with a Chinese Publisher to release any games in the mobile market as well.
This freeze will create a lot of friction with multi billion dollar company with a lot of business interest in China. As bad as the, partnering with a Chinese Publisher to release games in China requirement is, another regulation China put in place is for all foreign game companies releasing games in China will require to go through a 20 day review period that must abide by strict and stringent guidelines in orders to get their game approved for release.
This freeze will affect games that have not been approved by the China gaming board and upcoming games like Netmarble’s Lineage II Revolution title address’ concerns, as Tencent is preparing for a Nation wide launch but a dark cloud hangs over this product and their partnership based on these new regulations that are being enforced by the Chinese government.