China Tightens Limits on MMOs

It seems that China is eager to make sure that foreign companies are shut out of the lucrative MMO market of the country, which is set to generate a record amount of revenue this year.

The General Administration of Press and Publication together with the National Copyright Administration of the Communist state have announced that they now hold the power to pre-approve and place restrictions on all the titles that are about to be launched and have also said that all the foreign entities are prohibited from investing in Chinese companies that are operating online games.

If a videogame is changed in any way or updated, then they need to be re-certified or risk losing their operation rights in China, which might prove to be a serious stumbling block to MMOs that often require quite significant patches at regular intervals in order to add new features or to eliminate bugs. The over-the-summer suspension of service for World of Warcraft, which switched operators and was taken offline, might happen to other titles in the near future.

Adam Krejcik, who is an analyst for Roth Capital Partners, told the Wall Street Journal that China wants “to prevent overseas firms from participating in or effectively controlling online game operations.”

On some level, the announcement is part of an ongoing internal conflict between the Ministry of Culture of China and the General Administration of Press and Publication over who has the overall authority to deal with online games and the companies that publish them.

The Culture Ministry oversaw the World of Warcraft situation and signed off on getting the MMO back online, while the GAAP recently said that they were not aware of the decision and that it needed to regulate any content offered in online titles.