China could be a big problem for videogaming

Nov 7, 2009 16:01 GMT  ·  By

2009 has not been a great year for World of Warcraft when it comes to its Chinese operations. Blizzard, the creator of the game, has decided to change the Chinese operator for the MMO from The9 to NetEase, a company that has promised to provide a bigger percentage of earnings as royalties.

But the transfer itself was hit by delays and resulted in the game being taken offline in China for a while during the summer and now it seems that the General Administration of Press and Publication has ordered the operator to suspend the MMO, cease accepting any payment related to it and stop making new accounts.

A Reuters story mentions that Yo Yongfu, the Chief Executive Officer of an Internet firm in Beijing, sees the suspension as part of a conflict between the GAAP and the Ministry of Culture, both trying to expand their power over the fast growing sector of online gaming. Yongfu said that “This is different from operating a businesses in the U.S. or Europe. For Chinese businesses expanding in China, we need to learn how to operate suitably in the environment in order to thrive and survive.”

The problem is that more sinister moves might be behind the decision to suspend operation of World of Warcraft in China. Even as shares of both NetEase and Blizzard dropped, those of other online game operators like The9 and Shanda have gone up with analysts saying that if World of Warcraft cannot be played in the country, other MMOs locally developed will gain more players.

Could this be the beginning of a sort of videogaming nationalism on the part of the Chinese? The potential of the online gaming market in China is huge, even if it is some time until it is fully realized. If Western MMOs, like WoW, are banned from operating in the country, local videogames will prosper, resulting in better results for the Chinese firms that operate them and easier to control content for the Communist ruling party.

The problem is that what it is happening now with MMOs might happen tomorrow to any genre. It's not hard to imagine a future where Modern Warfare 4 is banned from China so that the locally developed People's Liberation Army Simulator 2 might have a bigger market share.