China has refused to issue any new video game licenses since the summer of 2021, and the inaction has led to more than 140,000 small game studios and related companies going out of business, the South China Morning Post reported today.

Under Chinese law, games developers must obtain a license to submit new titles to app stores such as Apple Inc.’s App Store and other marketplaces. But regulators stopped issuing new licenses in mid-2021.

China’s National Press and Publication Administration, the agency responsible for issuing the licenses, has not published a list of newly approved games since the end of July, and is likely to continue to abstain from doing so, the South China Morning Post said. It’s the longest suspension period of new game licenses since a similar nine-month blackout in 2018.

Chinese media reported at the time that the NPPA decided to suspend new game licenses in July as approvals in the first half of the year were “too aggressive.” At the time it wasn’t clear how long the hiatus would last.

The NPPA hasn’t said so, but the freeze on new licenses is believed to be linked to a government crackdown on gaming addiction that led to restrictions being placed on how long minors could play games each day.

Without a license, games developers are unable to submit new titles to any app marketplace, and nor can they update existing games. Apple has reportedly worked with Chinese authorities, suspending updates and pulling games from the regional China App Store that don’t have a license from the NPPA, in order to comply with local laws.

The apparent ban on new games has had a negative effect on China’s games development industry. According to the South China Morning Post, up to 140,000 firms, including game studios as well as publishing, advertising and merchandising businesses related to the industry, have gone out of business since July. That contrasts with the 180,000 videogame firms that closed during the entirety of 2020.

The lack of new licenses has also affected China’s major tech players, with TikTok parent firm ByteDance Ltd. and Baidu Inc. reportedly laying off employees in their gaming divisions, while Tencent Corp. and NetEase Inc. are said to be putting more resources into foreign markets.

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