14,000 Chinese gaming companies have shut down as licensing stops

In 2021, China put major restrictions on gaming in the country and even stopped licensing new games. As a result, 14,000 gaming-related businesses have deregistered and effectively shut down since July of last year.

China did more than just ban video games for kids during school nights in 2021. The country’s National Press and Publication Administration (NPPA) also froze its game licensing process. The NPPA hasn’t approved any new titles in six months, making this the longest amount of time China has suspended the process.

While thousands of small companies have shut down, larger ones have adapted to the stalled gaming industry in China by looking to new markets and laying off employees. Tencent is opening a branch in Singapore, while ByteDance — parent company of TikTok — has been laying off employees at Ohayoo, a gaming company focused on the Chinese market.

Ohayoo’s 150 games have been downloaded over 500 million times, but success hasn’t made the company immune. ByteDance has now delayed Ohayoo’s IPO to the end of 2022 and has laid off “nearly 100” employees.

This is far from the first time China has restricted gaming within its borders. All video game consoles had previously been banned for 15 years, with authorities citing a concern over childhood development. China’s president has spoken out against video game addiction among minors and believes that making gaming for more than a few hours illegal was the best solution. He’s also capped the amount of money children can spend on games to 200 yuan ($31 USD) a month.

But China’s gaming restrictions for kids haven’t exactly worked. SupChina reported that once Chinese children use up their limited gaming time, they turn to social media and watch others game. And on the internet, kids can pay to borrow adults’ accounts for a few hours so they can circumvent the rules for minors.

With children’s gaming freedoms restricted and a national moratorium on new game licenses, it’s unclear if the country — which has called video games “spiritual opium” — will change its tune anytime soon.