What Happened: Chinese video platform Bilibili has announced it will ban the livestreaming of more than 60 video game titles, including Grand Theft Auto, Rainbow Six Siege, and The Witcher 3, for including bloody, violent or sexual content. The move comes as Beijing dials up regulations on the gaming sector to promote positive social values, from extending a freeze on new video game licenses to blacklisting global video game distributor Steam for “illicit activities.” In 2021, the world’s largest video game market saw major changes after the government implemented a strict playtime cap for minors and blasted online games as “spiritual opium.”
The Jing Take: With Bilibili being best known for its anime, comics, and gaming (ACG) content — although it has recently evolved into a key beauty marketing platform as well — the news is surely a blow to many users. But more importantly, it reiterates the government’s unrelenting scrutiny of its online entertainment spaces and dampens the future prospects of gaming developers in China.
For starters, the ongoing freeze on video game licenses, the longest suspension since 2018, has already put 14,000 small studios in China out of business. And tech giants have not been immune to troubles either: sources told South China Morning Post that search engine Baidu would significantly downsize its core video gaming development team after reporting net losses of $2.6 billion for the latest quarter. ByteDance similarly laid off dozens of employees from Ohayoo in October, despite the gaming unit publishing 150 titles and gaining more than 500 million downloads since being established in 2019. Even Tencent, the world’s largest game publisher, is looking outside of China’s borders for future growth, with plans to open a new studio in Singapore.
What does this all mean for global brands? First, China boasts roughly 665 million players — essentially half of its population — so forsaking the entire gaming sector due to regulatory uncertainties is beyond a missed opportunity. Rather, brands must carefully review which titles to collaborate with, knowing that highly popular foreign games like Grand Theft Auto and Fortnite that feature violence may not survive long in the market. Alternatively, they could also consider teaming up with Chinese-made games, which, in fact, raked in more than $18 billion in sales overseas last year. Or, if digital fashion is all they want, they could simply skip the headache and try their hand at China’s expanding metaverse. Game on.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.