The Chinese government recently issued gaming licenses (game service permits) for foreign games, including three additional approvals for Korean games. As a result, Korean games have obtained a total of 10 licenses in China this year. With the reopening of the world's largest gaming market, interest in the domestic gaming industry is growing. However, there are concerns that with the growth of the Chinese gaming industry, excessive expectations akin to the past should be avoided.
◇ Fourth issuance of K-games' licenses in China this year
According to the National Press and Publication Administration (NPPA) of China on the 29th, the agency announced on the 23rd that it had issued foreign investment licenses for 13 foreign games. A gaming license is a type of service permit issued by China for games released in its domestic market. It is mandatory to obtain one to sell in-game currency. There are two main types of licenses: domestic licenses (issued for games in China) and foreign licenses (issued for overseas games).
▲ Netmarble's 'Seven Knights: Idle' ▲ Neptune's subsidiary Nimble Neuron's 'Eternal Return' PC version ▲ Gravity's 'Ragnarok Reverse' are among the three games that have received foreign licenses. 'Seven Knights: Idle' is a game serviced by Netmarble and developed by its subsidiary Netmarble Nexus. Netmarble launched the game globally in September 2023, except for some regions like China. The game introduces an idle system based on the existing 'Seven Knights' intellectual property (IP) and has reached second place in Google Play revenue in South Korea.
Nimble Neuron previously received a license for the mobile version of the 'Eternal Return' IP in July 2022. It was confirmed as a game not publicly disclosed at that time due to the license issuance news. It is understood that the local Chinese game company is in charge of development while Nimble Neuron, the IP holder, oversees the review. Gravity's 3D massively multiplayer online role-playing game (MMORPG) 'Ragnarok Reverse' is a game that aims to differentiate itself from other 'Ragnarok' IP games by introducing idle elements and a horizontal-vertical screen transition system. Following its launch in Southeast Asia in June, it is preparing for a service in the Chinese market.
This marks the fourth time this year that Korean games have received licenses. In February, ▲ Nexon's 'Dungeon & Fighter Mobile' ▲ NeoWiz's 'Cat and Sprout' ▲ Netmarble's 'King of Fighters All-Star' ▲ Gravity's 'Ragnarok Online' PC version received licenses, and in June, ▲ Pearl Abyss's 'Black Desert' PC version obtained service permission in China. In October, ▲ NCSoft's 'Lineage 2M' ▲ Shift Up's 'Goddess of Victory: Nikke' received their licenses.
◇ Growth of Chinese games... Excessive confidence is unwarranted
In the past, China was the largest export market for Korean games. Before the Hallyu ban (Hanhanlyeong, 한한령), 48 types of Korean games were exported to China over three years (2014-2016). However, since the implementation of the Hallyu ban in 2017, China has effectively blocked the entry of Korean games for nearly six years by not issuing licenses.
This year, as exports to China have resumed in earnest, expectations in the domestic gaming industry are also rising. The issuance of licenses in China significantly affects the revenue of domestic game companies. Nexon's 'Dungeon & Fighter Mobile' released in China in May surpassed $1 billion in global cumulative revenue just four months after its launch, with 82% of the revenue coming from China. KRAFTON's 'PUBG Mobile' and Smilegate's 'Crossfire' have also gained popularity in the Chinese market, positively impacting their performance.
However, the resumption of licenses in China is rooted in the confidence that its domestic gaming industry has grown, leading to concerns that excessive expectations are unwarranted. Only 5-6 years ago, Korean games held an advantage over Chinese games in terms of technology and gameplay; however, the situation has reversed recently. Indeed, in August, the Chinese company Game Science launched the console game 'Black Myth: Wukong,' which sold over 10 million copies within three days of its release, achieving global success. In the last quarter, the global market revenue of games developed in China reached $5.169 billion (7.644 trillion won), a 21% increase from the previous year.
Professor Kim Jung-tae from Dongyang University stated, "The games that have recently obtained licenses in China may have passed their peak popularity, which means they might be losing freshness in the market," adding, "The Chinese government will likely continue to issue licenses in this manner until its domestic gaming industry's completion quality improves."