CMGE Technology Group, China's largest publisher of mobile games, has filed an initial public offering on Hong Kong's stock exchange, aiming to raise about $400 million to $500 million. The company is behind the successful titles namely Legend of Sword and Fairy, Xuan Yuan Sword, and Monopoly.

CMGE has 61 mobile games in its names in the 42 months to June 30 of 2018. The company boasts of 50 more games coming by the end of 2019, according to the prospectus it submitted to Hong Kong's exchange. The company published its games via Tencent, Apple, Qihoo, and Baidu and other similar third-party platforms. 

Ten of the 42 games that CMGE launched earlier this year remains active while 10 of its 26 licensed intellectual properties and 20 of its 70 gaming licensing agreements will be subjected for renewal by the end of 2019 according to the South China Morning Post.

In its submitted prospectus, CGME warned future investors that the games it published in the most recent months are developed by third parties. This means the products are under licensing agreements that generally only last three to five years of which renewal is entirely dependent on the owners' discretion. CGME also cautioned that online mobile game market in China has reached a different level of competitiveness. There will always be new games and services introduced as well as new technology being adopted.

Aside from ever-evolving online gaming products, publishers like CGME are also faced with the challenge of government regulations and player's evolving preference.

The Business Times reported on Aug. 31, that China's Education Ministry announced it will control the number of online games, implement stricter age-appropriate restrictions, and limit the allowable time that minors could play online games. The ministry explained that this restriction is in accordance with the government's effort to reduce the number of children suffering from myopia or more commonly known as nearsightedness.

An MOE report said 36.5 percent of fourth graders and 65.3 percent of eighth graders have myopia or other related eye condition. The Peking University, on the other hand, found that 70 percent of high school and college students were also nearsighted.

The government decided to address the health concern as early as possible to avoid possible labor shortage in sectors that require good eyesight such as the aerospace sector, manufacturing, and the military.

Most importantly, China's government has to be extremely discerning with its game approval over concerns on violence, sexually explicit content, and gambling. Bloomberg reported mid-August that China has been delaying its approval of online games content and licenses because of these concerns.

Beijing's new game approvals will continue to drag for the coming months to a year according to Alicia Yap, Citigroup Global Market's head of pan-Asia internet research.

Shawn Yang, executive director of Blue Lotus Capital Advisors, added that Chinese gamers are also becoming more mature, hence being extra selective with content.

CMGE has become a name in the online gaming industry in 2009 as part of Hong Kong-listed V1 Group. It became China's first mobile game developer listed in the United States but it delisted from the Nasdaq in 2015.