Korean Game Abandoned by China... 3rd Year of License Suspension

Chinese Games That Imitated Korean Games Have Rapidly Developed in Recent Years
"Now Korean Games Should Actually Follow Chinese Games"

[Asia Economy Reporter Jin-gyu Lee] "Until the early 2010s, China used to imitate Korean games..."

With the export route of Korean games to China blocked for the third consecutive year, Korean games are struggling to find a breakthrough. Meanwhile, the market dominance of Chinese games in the domestic market is expanding day by day, heightening the sense of crisis.

Although expectations for the lifting of the Hallyu ban (Hanhanryeong) are higher than ever due to Chinese President Xi Jinping's visit to Korea in the first half of this year, the game industry also observes that even if China resumes issuing game licenses (panho), it will be difficult for Korean games to sweep the Chinese market as they did in the past.

According to the game industry on the 27th, the industry expects that discussions on resuming the issuance of panho will take place if President Xi Jinping visits Korea in the first half of this year. The Korea Game Society recently met with officials from the Ministry of Foreign Affairs and requested that the Chinese government strongly consider resuming the issuance of panho during President Xi Jinping's visit.

The Chinese government has not issued panho to Korean games since March 2017, using the THAAD (Terminal High Altitude Area Defense) conflict as a pretext. A panho is mandatory to service games in China. Foreign game companies receive foreign-invested panho, while Chinese game companies receive domestic panho. Foreign-invested panho has been issued to Japanese, American, and British games, but uniquely, Korean games have not been granted foreign-invested panho.

As a result, some criticize that Korean games have been "used and discarded" by the Chinese government. In the 2000s, when Korean games dominated the Chinese market, many Chinese gamers enjoyed Korean games, and until the early 2010s, China imitated Korean games. Suddenly, Korean games were blocked. An industry insider lamented, "Until the early 2010s, many games imitating Korean games were released in China, and Korea's blockbuster games greatly influenced Chinese games," adding, "Since the suspension of panho issuance and the rapid technological advancement of Chinese games in recent years, Korean games now have to follow Chinese games."

Domestic game companies are struggling to find a breakthrough as panho issuance has been suspended in China, their largest export market. According to the Korea Creative Content Agency's '2019 Korea Game White Paper,' the export share of domestic game companies to the Greater China region (including Taiwan and Hong Kong) decreased by 14 percentage points from 60.5% in 2017 to 46.5% in 2018. Meanwhile, Chinese game companies earned about 2 trillion won in sales in the Korean market last year, encroaching on the domestic market. According to the '2019 China Game Industry Report' by the China Audio-Visual and Digital Publishing Association Game Committee, Chinese game companies recorded sales of approximately 1.916 trillion won in Korea last year. Chinese mobile games such as Lilith Games' 'Rise of Kingdoms' also dominate the top ranks of domestic app market sales.