China's ongoing game license freeze prompts decline in market forecast

The market analysis firm Niko Partners has adjusted its 2018 forecast for PC and mobile game revenue in China, dropping those predictions by 3.8 percent and 2.4 percent respectively. 

Those projected decreases are the result of a significant ongoing restructuring process affecting the government departments in charge of handling the complicated licensing process for games seeking a release in China.

That restructure, which has frozen the licensing process for most of 2018, could carry on until April 2019 by Chinese law, but analysts at Niko Partners expect it to wrap up before 2018 is over.

Still, the firm has adjusted its forecasts for both PC and mobile game revenue to account for the halt. PC game revenue for 2018 was previously estimated to hit $15.8 billion in China by the end of 2018, but the firm now expects closer to $15.2 billion, a 3.8 percent decrease. Mobile revenue was previously projected at $16 billion for 2018. That forecast has since fallen by 2.4 percent to $15.6 billion.

The report notes that, while the freeze is currently preventing new games from launching in the country, player spending in China should rebound from this temporary lull by 2020. Meanwhile, the firm expects game developers based out of China to look more toward markets outside of the country in the future as a result.

While the Chinese government is also currently strengthening rules that dictate how long minors can play games, Niko Partners says those changes did not result in any shift to its projections. More details on the findings contained in the report itself can be found on the Niko Partners website.