According to the report, more than 14,000 video game companies closed between July and December 2021, bringing the market to a halt.
Many employees at several Chinese video game companies lost their jobs after a long time when regulators failed to license new games.
The licensing freeze has dragged on for six months, leaving game developers and publishers in limbo as they await a restart in the formal approval process for video game distribution in the United States. Mainland flowers.
Game maker Perfect World, one of China’s largest game companies after Tencent and NetEase, and a partner of Steam China, said it had laid off “several hundred people” from its staff. in the fourth quarter of 2021 to cut costs as revenue declines. There are currently 4,000 employees in Perfect World’s R&D department and up to 1,000 positions will be cut in the coming months, the company said.
Bilibili and Baidu have also cut jobs in their video games division over the past two months. China’s video game industry has been in a regulatory freeze since July 2021, when the approval process for new games was halted.
Government officials say they have suspended these assessments to create a “healthier” environment for young people and prevent gaming addiction. Video game companies then faced even tougher conditions as playtime for minors was capped at three hours per week starting August 2021. Some The game is removed from the app store.
Chinese regulators issued a total of 755 new game licenses between January 1 and July 22, 2021, down 46% from the figure for the whole of 2020. The months-long license pushed the total revenue of the video game sector to 296.5 billion yuan ($46.6 billion) for the whole of 2021.
The annual growth rate was 6.4%, the lowest in three years, and user growth stalled, a report published on the industry’s annual summit shows.
Video game publishers expect regulators to restart the approval process in November 2021, but the process remains stalled.
Pausing new game approvals is particularly damaging for smaller developers. According to business data aggregator Tianyancha, more than 14,000 video game companies closed in the second half of 2021.