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With licenses in hand, Korean game companies bet big on China

People play video games at an internet cafe in Beijing, China, Jan. 8.  EPA-Yonhap

Korean video gaming companies, grappling with geopolitical risks and regulatory pressure in China over the past few years, are seeing a future in the world’s largest video gaming market with newly granted licenses and more upcoming titles, according to industry insiders and analysts, Thursday.The top three video gaming companies in Korea — Nexon, NCSoft and Netmarble — have all received licenses in the latest batches approved by China’s gaming regulator. Nexon’s Dungeon & Fighter (DnF) Mobile and Netmarble’s The King of Fighters All Star were among the 32 approved foreign titles announced on Feb. 2, while NCSoft’s Blade & Soul 2 was one of the 40 titles approved for import last December.The most notable title was DnF Mobile, a role-playing game developed by Nexon and operated in China by Tencent Holdings, which runs the world’s largest video gaming business by revenue. The game was adapted from Nexon’s flagship PC title, DnF, which was launched as early as 2005 and became one of the highest-grossing video games ever, with over $22 billion in lifetime revenue as of June 2023.

The approval of the game came as a surprise, as DnF Mobile did not have a smooth journey in the country. Nexon originally planned to release the mobile game in China in collaboration with Tencent in August 2020, but the companies suddenly canceled the launch even though it had more than 60 million pre-reservations at that time, citing the need to adjust to regulatory requirements. DnF Mobile was released in Korea in 2022.On Tuesday, a team of designers of the game said through its official WeChat account that a new round of testing will start at the end of February, after “our preparations have finally entered a new stage.” The mobile title is just one of the latest examples of how Korean game companies are betting big on the Chinese market, as they have received more than a dozen licenses since late 2022, when Beijing started to ease years of controls on Korean game companies’ operations in the territory.China started a crackdown on the video gaming industry in late 2021 with an 18-month licensing freeze on foreign games. What further choked the Korean game industry was Beijing’s ban on Korean cultural imports that started in 2017 in retaliation against Korea’s deployment of the U.S. THAAD anti-missile system.

In December 2022, seven Korean titles — including Lost Ark by Smilegate, MapleStory M by Nexon and Ni no Kuni: Cross Worlds by Netmarble, were among the first batch of 44 licenses given to the foreign games after the crackdown. By early February, when the latest batch was released, the number of approved Korean games had grown to at least 18.The increased approvals were seen as an apparent signal that the country is easing its controls on Korean video games. Before that, only two Korean games had received the licenses in the six years since 2017.With the licenses, the Korean companies have launched or have been staging an entry of their titles, such as DnF Mobile’s testing and Netmarble’s launch of Ni no Kuni: Cross Worlds in the first half of 2024.DnF Mobile has raised high expectations from both China’s gaming community and industry watchers. Many players took to social media to express their excitement about the approval. At the same time, analysts have also expressed expectations that the game will come as a revenue boost for both Tencent 슬롯게이밍 and Nexon.

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