America installed a THAAD missile system in South Korea. This angered China and they retaliated by putting a ban on South Korean goods, including video games.
Nikkei is reporting that Korean-based publisher Nexon saw a 7% drop-off in share price after investors pulled out when they found out that China plans to put a block on all imports from South Korea, which included video game licenses.
The report indicates that Nexon was still able to squeeze in approval for Dungeon Fighter Online to release in China, and the title is still planned to debut in the People’s Republic later in the year for mobile phones. Other games in development or already approved won’t be affected, but newer games and upcoming titles that have not been approved yet by the Chinese Ministry of Culture could be affected.
Nexon confirmed to Nikkei that their earnings haven’t been impacted by the Chinese regulators… yet.
Analyst Daniel Ahmed also chimed in on Twitter to explain the situation.
So right now the Chinese government is planning to block operating licenses for new games from Korean developers or based on Korean IP.
— Daniel Ahmad (@ZhugeEX) March 8, 2017
Of course if this goes ahead then Korean games companies will be affected, as many recognise a good chunk of revenue from Chinese operations
— Daniel Ahmad (@ZhugeEX) March 8, 2017
This could hamper the South Korean gaming industry more than what South Korean regulators and branches of their government have already imposed on the industry over the past years, which has ironically driven a few companies into the arms of China.
Despite the fate of games being up in the air, China’s deliberate move against South Korea has already caused a major drop-off in sales and revenue in other aspects of the South Korean entertainment industry, such as the K-Pop and K-Drama sectors. There have seen massive dips in sales and revenue for certain music acts and production companies since China’s ban has been instituted, as reported by Digital Music News.
What could this mean for the future of the South Korean gaming industry? Well, it all depends on how strict the enforcement will be from China, and whether or not revenue will be impacted long term for Korean publishers.
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