Tencent is pulling back its marketing budget in response to China’s ongoing game freeze

    
25
He's not even supposed to be here today.

Tencent has not been weathering the Chinese game block very well. Sure, the company has been doing its best, but a 28% stock drop is a pretty huge impact, and the new draconian anti-addiction measures put into place by Tencent are an effort to avoid further regulation by the government. Now it’s taking things to the next step by pulling back its marketing expenses, trying to basically issue damage control for the games still waiting on approval as the government restructures. Executives are asked to return any funds for marketing games that have not yet been approved and hunker down with the rest of the company until the approvals come back online.

The game freeze in China is a result of ministries being shut down and reformed, preventing any formal approval process from remaining in place for new titles entering the nation. Analysts are split about exactly when this freeze will end, but it’s already had a massive impact on the Chinese game industry, which in turn has ripple effects throughout the entirety of the gaming industry. Which means it’s a pretty big deal when a huge gaming company asks its marketing executives to weather the storm together.

Source: Gamasutra

25
LEAVE A COMMENT

Please Login to comment
  Subscribe  
newest oldest most liked
Subscribe to:
Reader
Bryan Correll

For those of you who believe this is being done for altruistic reasons, please cite the official statements from the Chinese government that this is the case. But don’t bother looking, because there have been no official statements from the government about the freeze. They have never even officially stated that a freeze is in place. Any reasons you have heard are from anonymous sources. A special “green channel” was opened in August to allow limited one month approval for “testing purposes,” But only 10 games were approved through that channel before it was shut down in October. And while the headlines have mostly focused on Tencent and other big companies, the freeze is particularly hard on small studios who simply don’t have the resources to wait things out.

Sources:
(1) https://www.reuters.com/article/us-china-videogames/delayed-wages-lower-profits-chinese-gaming-firms-fret-as-approval-freeze-bites-idUSKCN1L82O4
(2) https://www.bloomberg.com/news/articles/2018-10-24/china-said-to-halt-special-approval-process-for-new-games

Reader
Mr.McSleaz

I see a lot of comments about the freeze being about loot boxes & childrens screen time.
It has Nothing to do with that.

This is about revamping the system to allow them to monitor in-game communications for the 2020 Social Credit Scoring System that’s coming.

Reader
Nemui Byakko

If it is just your guess, please write “in my opinion”. If it is a conclusion based on the facts, please present them. As for now, it looks like another piece of propaganda – from opposite camp.

Reader
Kickstarter Donor
Loyal Patron
Jack Pipsam

Pretty much, anyone who happens to conveniently ignores China’s mass crackdown on communication, internet, speech/thought and human rights in general, combined with their social credit system and only allowing approved pieces of media into the nation. To think that this is simply “Think of the children” is beyond the pale.

We’re effectively seeing people turn a blind eye to human suffering in China because they hate lootboxes. I hate lootboxes too, but this nothing to do with it.

Vexia
Reader
Kickstarter Donor
Vexia

Not to doubt, but do you have any articles or other sources where one can read and learn more about this new measure and the motives behind it? I checked the source for this article, but even that leaves me with so many unanswered questions.

Line
Reader
Line

This does not bode well for the industry.
And that shit could spread with the ongoing geopolitical climate… another recession is the last thing we need.

Reader
Loyal Patron
Patreon Donor
Armsbend

I think this is an opportunity for the West to take a look at real human research instead on relying on dubious at best research performed by undergrads. I applaud China for this bold move. It has literally no downside.

Dantos
Reader
Dantos

Well, remember this is not just about the harmful effects of lootboxes or screen time on children, this is about China wanted to more control over how/which games influence their culture as a whole, which im sure is part of the reason the approval process was transferred to the ministry of propaganda.

Reader
silverlock

You left out how multi player games also present another form of communication that needs to be monitored.

Reader
Loyal Patron
Patreon Donor
Armsbend

Yes.

Line
Reader
Line

The Chinese government never gave a shit about any study that doesn’t help them control people.

In this example and many others, it will only damage their industry and accelerate social unrest, which god emperor Winnie is perfectly fine with.
He has plenty of new concentration camps to fill up and a growing list of disappeared people like Marxist activists, unionists, librarians… who cares about the economy and society when you are all powerful. Just take a look at Putin’s Russia.

Vexia
Reader
Kickstarter Donor
Vexia

How about all the cut jobs as the industry bleeds money? Sure, gambling as monetization isn’t good, but the executives who made that decision probably aren’t the ones whose entire livelihoods are at risk unless this freeze doesn’t lift for a very long time.

Reader
Kickstarter Donor
Loyal Patron
Jack Pipsam

China is certainly known for its bold moves.

Reader
Schmidt.Capela

China was one of the first countries to do something concrete about lootboxes (mandating the disclosure of the odds). Between this and the use of protecting children as an excuse to make this regulatory revamp, I wonder if China might take some bolder steps against lootboxes in their new regulations.

This would really mess with the lootbox model. China isn’t just a large market, AFAIK it’s the second largest market for games, and projected to take the lead in the not so distant future.

Reader
Mr.McSleaz

This freeze has nothing to do with loot boxes. They need to revamp the system so they can monitor the peoples communications in Video Games. It’s part of their Social Credit Scoring system which will be in Full Effect in 2020.

Reader
Nemui Byakko

Some facts about it?

Reader
rafael12104

It’s crazy hysteria. Seriously.

Setting aside that the decisions by this ministry are based in large part on what amounts to old wives tales (“you’ll get myopia if you play games, junior”) games are a great source of revenue and employment. Tencent puts China at the top of the heap and thus is another sphere of economic influence worldwide.

What is wrong with these people?!

Reader
Loyal Patron
Patreon Donor
Armsbend

We have literally no idea what research into the human condition China has on the subject. Instead, we are relegated to poorly thought out and research thesis’s in our own country that do not seem to be interested in taking an honest look at the subject. All because of our own obsessions and misgivings about our own lives – past and current.

If anyone can honestly name a downside to having a 11 year old playing only an hour of video games a day I’d call them a fool.

Reader
Schmidt.Capela

My gripe with focusing on games for that is that it isn’t effective. The issue they need to be tackling is excessive time spent looking at a close screen, of which gaming is just one of the potential motivations; the same issue can happen if children spend too much time watching videos on their phones, or texting, or checking social networks, etc.

If the government only goes after games then it will be clear that they wanted to target the gaming industry and the health concerns were just a scapegoat. There’s even a good reason for the government going after the gaming industry, as one of the tools used to keep the population in line is controlling all art and culture that the population has access to, and gaming is quickly becoming more influential in that area.

Reader
Loyal Patron
Patreon Donor
Armsbend

We do not know if it will be effective or not. It could be extremely effective. It could do nothing. I highly doubt China is simply interested in going after games – this is an easy target that could open the door to other avenues. An easy one since it can be more easily monitored.

Here is what we do know: Tencent will not be buying any video games companies from the west in the next few years. The buying spree is over for now.

And this is just my two cents. I think playing too much when I was a kid didn’t do me any favors > I’ve seen zero compelling research seeing how gaming has any benefit what-so-ever > society is crumbling around us. Trying anything seems like a worthy move at this point.

Reader
Schmidt.Capela

Here is what we do know: Tencent will not be buying any video games companies from the west in the next few years. The buying spree is over for now.

Is it? Issues preventing a company from investing at home might make it the perfect moment to expand overseas. Depending on how restricting the new regulations are, we might soon see Chinese companies with piles of money they can’t properly invest at home rushing to invest abroad.

Dantos
Reader
Dantos

Chinese companies have been investing abroad for a while now, specifically to get their money out of the country to avoid currency regulations. But yes, this could push Chinese game companies out into the wider market even more and specifically try to market to western audiences.

Reader
traja

Why would their comprehensive and peer reviewed piles of studies on the subject be classified? It doesn’t make any sense from a scientific perspective. Also the least scientific thing you can do is base your opinion on assumed studies that you don’t even know exist.

Reader
rafael12104

Let me clarify. The fact that we do not know what evidence they have is part of the issue but most importantly the fact that they don’t have to provide any evidence at all is the biggest concern.

Arms, I can understand your concern. And I have to admit that if I had kids I would have a different perspective. But even though using incendiary terms like “wives tales” is over the top, without some explanation of the evidence for their decisions that is what I believe we are looking at.

Now I don’t disagree that we are victims of our own biased perspectives as westerners. But the big difference is that when our decision makers make such claims they have to have proof and are subject to scrutiny.

In China it’s a black box.

Hope this makes sense. I’m replying from my crap phone and my mobile typing sucks.

harbinger_kyleran
Reader
harbinger_kyleran

Actually quite a bit of research has been done on both the benefits of children playing video games and harm as well.

https://www.psychologytoday.com/us/blog/freedom-learn/201502/cognitive-benefits-playing-video-games

Like most good things in life, they should be enjoyed in moderation but is one hour a day too much for an 11 year old, hard to say, depends on what they do instead of gaming I suppose.