In March this year, China reportedly stopped issuing new service licenses to Korea-made games as part of economic retaliation against Seoul’s preparations to install the Terminal High Altitude Area Defense system, which China has been vehemently opposing.
Months have passed since then, but none of the Korean games that have filed for service licenses from the Chinese authorities have succeeded in obtaining regulatory approval. Exactly when it will happen remains uncertain, given diplomatic relations.
China is considered a critical market for Korean game companies, as it is a major revenue driver and a promising destination for their newly released games.
According to global market research firm Newzoo, China is expected to generate around $27.5 billion in game revenue in 2017, taking up around one-quarter of all global game revenue for the year.
Closely monitoring the situation are Korea’s game giants Netmarble Games and NCSoft, which have applied for the service licenses via Chinese game publishing partners and are still waiting for a decision.
Netmarble has partnered with Chinese internet and game giant Tencent Holdings to publish its smash-hit mobile game “Lineage II: Revolution” in China, while NCSoft is looking to bring its new mobile game “Lineage Red Knights” to China via Alpha Group.
Netmarble had aimed to launch the game by the fourth quarter. However, Netmarble CEO Kwon Young-sig signaled uncertainty over the game’s launch timetable during the firm’s second-quarter earnings call earlier this month.
Kwon said that Chinese authorities have “yet to issue a service license (to Tencent),” adding that it is “making due preparations to immediately begin servicing the game once the license is issued.”
According to a recent news report by The Investor, Tencent is aiming to publish the game in November, although the situation may suddenly change depending on diplomatic relations between Korea and China.
Like Netmarble, NCSoft is still awaiting a service license from China for its mobile game “Lineage Red Knights,” adding that the firm cannot make any projections as it is a matter to be decided by the Chinese authorities.
Moreover, NCSoft said it had yet to decide its plans for the Chinese launch of its latest hit mobile game “Lineage M.”
With rising uncertainty in China, Korean game companies have been stepping up their focus on global markets elsewhere, including Japan, Southeast Asia and North America.
Netmarble launched “Lineage II: Revolution” in Japan on Wednesday, after racking up around 1.63 million preregistrations for the game, a rare accomplishment. The game took the No. 1 spot on the free game chart on both Google Play and Apple’s App Store on the day, the mobile gamemaker said.
Last month, Korean mobile game publisher Gamevil and its subsidiary Com2uS formed new joint venture companies in Europe and Southeast Asia to step up their business in the two regions, viewed as underdeveloped markets with high growth potential.
By Sohn Ji-young (firstname.lastname@example.org)