It has been over three years since the Chinese government unofficially stopped approving South Korean games. A lot of South Korean game companies waited and waited. But things have not gotten better. Now, even if the Chinese government approves South Korean games, it is very difficult for South Korean games to succeed in China. This is because Japanese games and animations have become popular in China. In addition, Chinese game companies’ mobile game development capabilities have risen sharply over the past three years.
In August 2016, the Chinese government began to prevent South Korean companies and South Korean entertainers from doing business in China. This happened right after the South Korean government announced in July 2016 that it had decided to deploy THAAD in South Korea. The first hits were South Korean celebrities. At that time, there were a lot of articles saying that South Korean celebrities' schedules related to China were suddenly canceled.
Then, when exactly South Korean games did affected by this? The mobile game 'Lineage 2: Blood alliance', that was developed based on NCsoft's 'Lineage 2', was exhibited at the Snail Games booth of China Joy 2016. Later, the game was officially released in China and is still in service. In February 2017, 'Dungeon and Fighter Mobile', developed by Neople, got approved by the Chinese government. Until February 2017, the Chinese government was giving out version numbers to South Korean games. And that was the last. Since March 2017, the Chinese government has not approved any South Korean games.
In other words, it was from March 2017 that the Chinese government stopped approving South Korean games. And it has been over three years since that. In the meantime, a lot of South Korean games couldn’t be released in China, because they didn’t get approved.
Some mobile games developed by Chinese companies based on South Korean games got approved. However, strange things happened around these games. After an article appeared in South Korea saying, "The game developed based on this game got approved in China," the game was shut down.
After this happened in China, South Korean and Chinese companies were very careful when signing a game publishing contract. For example, Pearl Abyss did not disclose the Chinese company that signed the contract while announcing the fact that they signed the contract about Black Desert Mobile. This behavior seems to have the intention of maximally preventing something strange from happening when Black Desert Mobile is launched in China in the future.
The biggest problem is that market share of South Korean product has dropped a lot in China as the Chinese government's sabotage on South Korean products. Before the Korean government decided to deploy 'THAAD' in South Korea, it was easy to see South Korean dramas, songs, and games in China. The export volume of each cultural industry to China was also steadily increasing. However, everything stopped right after the South Korean government decided to deploy ‘THAAD’.
Since the game industry is part of the cultural industry, it is also influenced by movies and dramas. However, since August 2016, South Korean dramas and South Korean celebrities suddenly disappeared in China. From 2017, such measures have been greatly expanded. And market share of Japanese contents suddenly increased in China.
This also affected the Chinese game industry. As of 2019, Japan occupied the highest proportion in foreign game approval issued by Chinese government. In addition, as the popularity of Japanese cartoons and animations has increased, a number of mobile games developed based on famous Japanese cartoons have released in China. The representative mobile games released in 2019 are 'Dragon Balls’ and 'Slam Dunk’ This trend is expected to continue in 2020.
In summary, South Korean content has lost much of its place in China. It is impossible to predict when the Chinese government will approve South Korean games, but even if they do so now, it is unclear if South Korean games will gain the same popularity in China as before. This is because the quality of mobile games released in China has risen considerably over the past three years, and many of the South Korean IP and South Korean content have been shut down. What will happen if this condition lasts for another 2-3 years? None of South Korean game companies will try to launch their games in China.
The Chinese government has not approved South Korean games for more than three years, the Chinese government puts more and more restriction on game industry, and the quality of Chinese games has increased. Putting this together, the Chinese market is no longer a land of opportunity for most South Korean game companies. It's a market where you don't know when it's going to open. And it is very hard to succeed in there.
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