China started a new games ethics committee that raised hopes that the government is preparing to continue its approval process which was halted this year. Currently, the committee has already reviewed 20 game titles.
China is known as the world's largest video game market. The country stopped approving incoming titles from March because of the growing criticisms of video games. Critics claim that video games are violent and it leads to myopia. They also said that games are addictive to the younger generation.
China has at least 500 million online game users and its estimated revenue this year is $38 billion for online games.
After they stopped approving games, gaming-related stocks started to be pressured which clouded the government's outlook for mobile games. The freeze pulled the industries profit downwards. Tencent Holdings is the leading marketer of the industry. The company reported its first profit dropped in more than a decade this second quarter.
The Chinese government announced in August that the committee will be established. The committee will approve games and they will cap the number of available titles. It is the government's effort to limit the playing time of minors that limit their physical activities.
Hopes are high as the state-run media, Xinhua, reported that a new committee was established and it has already started reviewing mobile games. The news network said that the committee has requested a revamp of 11 titles to eliminate moral hazard. There are nine titles that were rejected.
Games insiders are welcoming the move by the committee who are composed of experts on games and adolescence problems. The members were chosen from universities, industry associations, research institutes, and media outlets.
The goal of the committee is to guide online gaming companies to follow social moralities and to prioritize the user's mental and physical health. It is also created to promote the healthy development of the online gaming industry.
According to Jefferies, a financial services firm, they are viewing the committee as a progressive step with more strategic directions likely to be given out by the end of this month. He added that it could potentially be followed by a timetable announcement of approval resumption before mid-2019.
Tencent failed to give its own insight into the event. According to reports, Tencent lost at least US$100 billion in market value because of the uncertainty of the revamp regulations.
