SMASH THE FOREIGN LEVEL DESIGNERS AND THEIR MARKETING LACKEYS

China quits flirting with blocking foreigners from their online gaming market and just flat out says “yeah, you ferengi aren’t welcome“.

China’s video game industry regulator the General Administration of Press and Publication (GAPP) and copyright watchdog issued a circular on Saturday prohibiting foreign investment in domestic online gaming operations through joint ventures, wholly owned enterprises and cooperatives.

The new directive also disallows foreign firms from indirectly influencing Chinese gaming firms through agreements or technology support.

It remains to be seen how this will effect large joint ventures already in place in China. This blog implies that part of the issue is a turf war between two powerful government agencies.

Interestingly, a Ministry of Culture (MoC) official “expressed his shock” (link in Chinese) at GAPP’s latest announcements, saying it clearly violates the State Council’s earlier guidelines. It’s quite rare to see different branches of the government argue in public, but the MoC will probably take some further actions to protect their turf.

That same blog also includes quotes to Chinese market commentators saying that at a minimum this means another closure for World of Warcraft while they pay the correct bribes get their paperwork in order.

In any event I’m sure this was all a pleasant surprise for all the Westerners in town for GDC China this week!

Takeaways:

1: OMGCHINA. It’s not broken down in the figures, but my suspicion is China is a pretty hefty portion of World of Warcraft’s revenue stream as well, despite the revenue per user being significantly lower. The Chinese MMO market dwarfs the Western market, both in subscriber numbers, and more importantly in revenue. China’s the new Korea. It’s tempting to say that “someplace else will soon be the new China”, but it’s difficult to imagine unless all of Europe becomes obsessed with Diablo 3 or something. It also means that the Chinese market is very vulnerable to collapse if that audience moves to something else (again, see Korea, where many users have moved on to FPS games).

2: Installable client is still the king in terms of revenue, which is somewhat surprising – and promising, it means that much of this market is still being driven by the “hard core” willing to download gigabytes of data to try out a game. As web installs catch up this could open the market still further.

3: This may be an artifact of DFC tossing up their hands and going “I dunno” at trying to guesstimate income figures, but recent high profiles have all interestingly fallen into the same “tier” of $50-150m annual income. LOTRO = AoC = WAR = Runescape. Note: one of these had a somewhat lower budget than the others…