China Bans Diablo Immortal: The Impact on Tencent and NetEase

The Chinese gaming industry has been experiencing a significant slump in recent months, with two of its largest developers, Tencent and NetEase, being left out of the recovery process. This is due to a licensing freeze imposed by the National Press and Publication Administration (NPPA), China's top watchdog for video games and other online media.

The latest list released by the NPPA includes 65 mobile titles, two for the Nintendo Switch, one for personal computers, and one browser-based game. However, Tencent Holdings and NetEase were once again excluded from this batch of approvals, marking a drought in new title releases that has lasted over a year.

Tencent's shares have slumped 37.4 per cent in Hong Kong since the end of last July, when the last list was released before the licensing freeze. NetEase's shares have fallen about 10 per cent in the same period. This is a significant blow to both companies, as they are unable to release new titles and capitalize on the gradual recovery of the gaming market.

The NPPA typically releases a list of new game approvals every month, with the exception of two prolonged suspensions in 2020. However, this drought has now lasted for over a year, leaving Tencent and NetEase out of the loop.

The impact of this licensing freeze is far-reaching, not only affecting the two companies but also the entire gaming industry in China. The country's US$49 billion video gaming market is one of the largest in the world, and any disruption to its normal functioning can have significant consequences.

In light of this situation, it is clear that China's gaming regulations need to be re-examined and reformed to ensure a more balanced and sustainable industry. The government needs to take into account the impact of its policies on the companies operating in this space and find a way to strike a balance between regulation and innovation.

As the Chinese gaming industry continues to evolve, it is essential for stakeholders to stay informed about the latest developments and trends. SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses, and infographics brought to you by our award-winning team, can provide you with the answers you need on this topic and many others.

China bans diablo immortal