Huge agency market driven by mobile games supervision: small developers in China face catastrophe

General office of The State Administration of Press, Publication, Radio, Film and Television (SAPPRET) of China recently published “The Notification Concerning Mobile Game Publishing Service Management”, regulating mobile games content verification, publishing declaration and game publication number application. And after July 1st, 2016, mobile games not authorized by SAPPRET should not be published and operated online.

With the date of implementation approaching, many Chinese mobile game developers begin to inquire about online cultural business license, verification and code number application.

In the question-and-answer website Zhihu, a practitioner anonymously pointed out two terrible situations that small and medium-sized game developers are faced with.

Those who are qualified for applying for approval are enterprises with online cultural business license, which is a troublesome license requiring more than ¥10 million registered capital and 3 months application cycle. What’s more, it can only be applied in Beijing and Shanghai, and around 30,000 yuan is required for registration (traffic fees excluded). Now the ¥10 million registered capital can be subscribed instead of being paid in, but the procedure still extremely complicated.

Meanwhile, the business applying for online cultural business license should not contain any foreign shareholders (including shareholder’s shareholder, and above). This requirement is so rigorous that personal developers, enterprises containing any foreign capitals and overseas game company have not any qualification for publishing and operating any game in China, not even qualification for applying for verification.

The results would be as follows if the new rules were carried out strictly:

  1. Small groups, personal and independent developers would be extinct, and mobile game startups would face insurmountable barriers.
  2. Big companies would enjoy less competition and more convenience to acquire talents. But the risks for developing games increase, as the approval is somewhat uncertain, and it would be very likely that a developed game is not approved.
  3. Many overseas games would be removed from app stores, but large overseas games could cooperate with the qualified domestic companies to circumvent the policy obstacles.
  4. A large number of small and medium-sized games would be off the shelf, while such games account for 70% of App Store and Android stores.
  5. Domestic game publishers would see higher value of themselves, especially those with “fast approval tracks”.
  6. A new group of intermediary service providers would emerge, to solve qualification issues for small and medium-sized developers via affiliation.
  7. Google Play and App Store would need to customize their dashboard for mainland China, and audit developers’ qualification upon submission.
  8. WTO-related lawsuits would emerge.
  9. More companies and studios would only aim for overseas markets.

As for the prices of mobile games agency, here is a list for reference:

Online game code number and ISBN number application price list: (the prices are the same for mobile games, web games, and PC games)

No-plot games including elimination games, parkour games, card games, 60 workdays: ¥15000;

Complicated games,

70-80 workdays: ¥17000;

60-69 workdays: ¥22000

50-59 workdays: ¥38000;

40-49 workdays: ¥58000;

30-39 workdays: ¥85000;

Filing in Ministry of Culture: ¥5000

In Beijing, the online cultural business license can be applied within 4 days with urgent application, and the price is ¥30000. (If there is need for other businesses such as code number application, discount is offered.)

There could be slight fluctuation regarding complexity of games.

Remark: ICP certification requires another ¥3000, and addiction prevention certification ¥4000.

The length of days doesn’t indicate the length of verification (of course you need to wait in lines if there are too many applications). The agents need to play the game thoroughly with high-ranking game accounts provided by developers, in order to see whether there is any disqualification.

The May 2016 domestic new mobile games observation report from DataEye showed that 1085 new mobile games emerged in the single month in China.

Let’s imagine half of about 10,000 new mobile games require agency (in fact many big game companies also rely on agencies to apply for verification) in one year, and the average price for each game is ¥20,000,the mobile games verification agencies could compose a featured market worth more than ¥100 million.

Based on Zhihu and YouXiWeiXun

Translating: Fang Xiaozhou

Editing: Karvin

Posted in cmgmnews

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