Pros and Cons of Government Game Permit in China

摘要

Since 2006, the market share of Korea-made games in China has decreased, and recently Korean game companies even began to withdraw from the Chinese market one by one. It is alleged that attractiveness of the market is lessened by the Chinese government's game policy. This paper examines influence of the policy on imported online games in China, analyzing how the market condition has been changed by the policy and examining whether the policy has sufficient flexibility to cope with rapid development of the game industry and the dynamics of the game market in China. In particular, the research examines the relationship between individual Chinese game policy and performance of Korean online games in China in terms of three stages of market entry: contracting stage, beta-test stage and operating stage. According to interview analysis of four major Korean online game firms, high entry barrier and unfavorable importation permit policy are the major reasons for decrease of the market share of Korean games in Chinese market. In the contracting stage, it is supposed that the policy of prohibiting wholly-owned subsidiaries maybe one of major reasons for decrease of the market share of imported games. In the beta-test stage, time delay due to publication permit of imported games, which has been segregated from domestic products, results in shrinking the market share in China. In the operating stage, repeated permit acquisition maybe one of major reasons for withdrawal from the Chinese market. In addition, the policy has indirectly supported domestic game firms to become huge global publishers which command local development studios. Thus, imported games gradually lost their market shares. Interviewers agree that the possible reasons for decrease of export volumes and retreat of Korean companies from Chinese market are not only the policy but also the uncertainty of the policies' changes. In addition, low degree of transparency and obscure executive standard of government regulations are other reasons.