The Chinese government has inserted itself into online game development as a result of content concerns – more moral than political. It inserted itself by the creation of an approval committee called the Online Games Ethics Committee (OGEC), which started with outright rejections of nine of the first twenty applications and the return of the other eleven to developers for specified revisions. There is a new boss in town. No new games of been released since March, a damper on a hot market that thrives on a combination of classic standards and excitement around new releases.
Most affected is the biggest game developer, Tencent, one of China’s big three tech companies. Its stock is down 48.3% from its January high. But don’t cry for Tencent, they are connected, things will likely turn back in their favor.