Synopsis:

  • From July 1, 2016, no mobile game can be published without pre-approval from the SAPPRFT.
  • A simplified approval process which is expected to complete within 18 working days will be applicable to qualified domestic games.
  • More holders of Online Publishing License will take part in the mobile game ecosystem and revenue share.

 On June 2, 2016, the State Administration of Press, Publication, Radio, Film and Television (“SAPPRFT”, “国家新闻出版广电总局”) promulgated the Notice on the Administration of Publishing Services of Mobile Games (“Notice”, 《关于移动游戏出版服务管理的通知》) to set out the pre-approval requirements of publishing mobile games in China. The Notice will take effect on July 1, 2016 and will be applicable to any mobile game published in China, regardless of the game genre or origin. At present, only around 5% of mobile games in the market are reportedly compliant with such requirements and the existing games without the SAPPRFT approval will have to be shut down if the relevant application can not be filed before October 1, 2016. As the first set of specific guidelines to detail the implementation of the Regulations on the Administration of Online Publishing Services (“Regulations”,《网络出版服务管理规定》), the issuance of the Notice indicates the full attention of the regulatory body to the fast growing and lucrative mobile game industry.

In line with the Regulations, the Notice mandates each mobile game should have a “Game Publishing Service Entity (游戏出版服务单位)” (“Publishing Entity”), holder of Online Publishing Service License (“Online Publishing License”, 网络出版服务许可) with online game publishing scope granted by the SAPPRFT, to take full responsibility for game content review and examination as well as the application for the SAPPRFT’s pre-approval prior to game publishing.

The Notice introduced a simplified approval process where the Publishing Entity is only required to submit a standard application form to provincial branch of the SAPPRFT at least 20 working days prior to the contemplated game launch date. The simplified process is applicable to mobile games that meet the following criteria (i) game copyright is owned by domestic individuals or entities, (ii) they do not contain any sensitive elements such as politics, military, nationality or religion, (iii) they have no storyline at all or only have a very simple storyline, and (iv) they are in the genres of casual games covering match-three, endless runner, top down shooter, board, puzzle, sports, music and etc. The simplified approval process, including the review of the completeness and accuracy of application information by the provincial branch of the SAPPRFT, the grant of approval by the SAPPRFT and the notification of the approval result by the provincial branch of the SAPPRFT, can be completed within around 18 working days if all required information is duly provided in the first place. The game can only be launched after the SAPPRFT has issued the approval. Within 7 working days following the game launch, the Publishing Entity shall report to the provincial branch of the SAPPRFT game operation information including the launch date, where to download the game, Operating Entity and whether in-app purchase is made available and etc. However, if the game launch is delayed more than 20 working days as originally planned, the Publishing Entity shall provide written explanations to the SAPPRFT.

For foreign copyrighted mobile games, the Publishing Entity shall follow the currently applicable approval requirements under which the required information is more complicated and the SAPPRFT sets no timeline for the process. For domestic mobile games do not satisfy the standards for the simplified process, the requirements and process are largely similar to those applicable to foreign games.

The Publishing Entity, as the applicant for the SAPPRFT approval and the ultimate responsible party for game content, shall closely supervise the game operation, including its regular updates. In case of any change to the Publishing Entity, game name or Operating Entity, the Publishing Entity shall submit such changes to the provincial branch of the SAPPRFT which will then report to the SAPPRFT for updating the existing approval. Any new version, updated version or new derivative introducing significant changes to the approved game will be regarded as a new game and its publishing shall be subject to a separate approval process.

The “Operating Entity” of a mobile game presumably refers to the party/parties responsible for the commercial operation of the game (including the distribution of the game to different APP stores, the collection of data and the payment from the players, and etc). The Notice permits a mobile game’s Operating Entity can be separate from the Publishing Entity while in practice one entity usually takes up two roles as long as it holds both Online Publishing License and ICP License. As far as small or middle size game developers or operators are concerned, it is quite challenging for them to apply or maintain Online Publishing License, however, they usually have to take a leading role in the commercial operation of the games including distribution, marketing, monetization and etc. Apparently the regulatory body would love to see more and more holders of Online Publishing License will act as the Publishing Entities for existing or future games and therefore participate the ecosystem and revenue share of mobile game operation. In particular, assuming there are only a limited number of Online Publishing License holders in the market, the cost of engaging a Publishing Entity to get approval from the SAPPRFT will continue going up if the mobile game industry is still booming.

Though the Notice presents no major regulatory changes to the publishing of foreign mobile games in China, foreign developers or publishers shall be alert that it is another strong signal that China government keeps strengthening the administration of mobile game industry.

There is no doubt the Notice will govern mobile games published on Android platforms in China, but it remains to be seen whether and how the Notice will affect games published on iOS platform in China.