Apple sets deadline for gaming apps to comply with Chinese law

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Apple has set a deadline for app developers to comply with Chinese laws around mobile video games, a move which could hurt some smaller companies.

The regulation, introduced by China in 2016, requires mobile game makers wishing to have in-app purchases or charge for their content, to get a license from a unit of the country’s censors. The approval number needs to be provided to Apple by June 30.

Apple has given notification of this development for awhile, but the deadline is a new addition in the past few days.

“Chinese law requires games to secure an approval number from the General Administration of Press and Publication of China,” Apple told developers in a message.

“Accordingly, please provide this number to us by June 30, 2020 for any paid games or games offering in-app purchases that you intend to distribute in China mainland. You can enter your game’s approval number and date below. To learn more, view the full text of the regulation. If you have questions, contact us.”

The message appears to suggest that Apple has been letting mobile games get published on its App Store without this license to date. It’s unclear what will happen to an app if a game maker doesn’t provide the approval number by June 30.

Apple declined to comment when contacted by CNBC.

Apple’s iOS mobile operating system has a more than 21% market share in China versus nearly 79% for Android, according to Kantar. Android app stores in China have been complying with the regulation since 2016.

China is an incredibly important market for Apple. It’s the world’s largest mobile games market. This year, market research firm Newzoo, expects iOS to generate 53% of total mobile game revenue in China which is around $13 billion. It’s unclear what kind of financial impact that the new rules might bring on App Store revenues in China.

But it could make it harder for smaller independent games makers to get games published. Obtaining a license from the Chinese government usually means foreign game publishers will need to form a partnership with a Chinese firm. For example, when Nintendo launched its Switch console in China this year, it did so in partnership with Tencent, the country’s biggest gaming company.

“The largest game developers will be able to partner with Chinese publishers such as Tencent, Netease and AppInChina in order to obtain a license and continue publishing their games in China,” according to Rich Bishop, CEO of AppInChina, a company that helps developers publish their apps in China.

“These partnerships typically involve a revenue share agreement, so this change in regulations will benefit the major Chinese publishers and reduce revenues even for game developers that are able to continue publishing in China.”

On top of that, all games need to be approved by the government. But Beijing is only approving a handful of games each month.

“This change means that every developer that’s currently publishing their iOS game in China has three options: apply for a game license; convert their game to an ad-only revenue model; or accept that they’ll no longer be able to generate revenue in China,” Bishop said.

“Unfortunately the government is currently only approving licenses for 20 to 30 imported games per month, so this solution will only be possible for a relatively small number of games.”

The 2016 law is part of China’s bigger push to get tighter control over the mobile games market. In 2018, Beijing said it was concerned about eye problems related to kids playing games. Game makers like Tencent brought in controls to limit the amount of time users were spending on apps. That same year, Chinese authorities froze the approvals of games and only started to grant licenses to titles from December 2018 and January 2019.

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