Game shares soar as China declares 'player ready!'

Game shares soared Thursday as China’s content regulator gave a nod to local game companies to run their services in the country for the first time in a year and a half, signaling sunnier spells for 2023. Netmarble jumped 17.74 percent to close at...

Visitors at Netmarble's booth at the G-Star 2022 gaming festival held in Busan on Nov. 17. [KIM JUNG-MIN]

Game shares soared Thursday as China’s content regulator gave a nod to local game companies to run their services in the country for the first time in a year and a half, signaling sunnier spells for 2023.

Netmarble jumped 17.74 percent to close at 60,400 won ($47.64) Thursday on the Kospi bourse.

NCSoft rose 3.34 percent to close at 448,000 won.

Kosdaq-listed Nexon Games increased 2.37 percent to 12,950 won.

Game developer Joycity advanced 11.14 percent to close at 4,040 won, after hitting the ceiling with a 29.99 percent increase at 9:15 a.m.

China’s National Press and Publication Administration on Wednesday announced that it granted approval for 44 overseas games to operate locally, which included seven Korean game titles such as Nexon’s MapleStory M and Netmarble’s Ni no Kuni: Cross Worlds.

The games’ publishing and management will be controlled by Chinese publishers.

China had banned Korean games’ service in the country since March 2017 with only a handful of exceptions, as part of an unofficial economic sanction against Korea over the deployment of the U.S.-led Terminal High Altitude Area Defense, or Thaad, missile shield.

The few exceptions were Com2uS's console roleplaying game (RPG) Summoners War: Sky Arena and Pearl Abyss's massively multiplayer online roleplaying game (MMORPG) Black Desert Mobile, which were granted operation approval in 2020 and 2021.

However, the barrier for Korean games was in place will before 2020. Summoners War began operations in Korea in 2014, but had to wait for six years to be approved in China. For Black Desert Mobile, it took three years after it was released in Korea in 2018.

Analysts predict that China’s approval will lead to a new spur of growth for domestic game companies.

“China takes up a quarter of the global game market,” analyst Lim Hee-seok of Mirae Asset Securities said. “The timing seems perfect because domestic companies were already aiming to launch new games targeting the global market as the Korean market has been suffering from slowing growth.”

China’s conservative attitude toward the content of games seems to have changed too.

“China, which has been conservative toward gaming narratives related to gambling, violence and sexuality, granted approval to MMORPG Ni no Kuni: Cross Worlds and A3: Alive,” analyst Kim Ha-jeong of Daol Investment and Securities said. “We may interpret this as a complete change of China’s policies and attitude toward the gaming industry. Hardcore domestic games which had no potential in China before may now be exported.

"The contribution of revenue of new games entering China will be reflected from the second half of next year," said Lim. "Black Desert M began to be serviced in China in April 2022, 10 months after it received its approval back in June 2021, and its revenue is now being reflected."

BY SHIN HA-NEE, LEE JAE-LIM [lee.jaelim@joongang.co.kr]