China: Issues Foreign Video Game Developers Face in Introducing Online Games to the Chinese Market

Last Updated: 29 September 2010
Article by Wang Rui

With the rapid growth of China's online video gaming market, China has become a particularly appealing target market for both Chinese and foreign online game developers, particularly those developing Massively Multiplayer Online Role-Playing Games (MMORPG). In 2009, 35 imported online games obtained approval for release in China, and imported games have accounted for 38.8% of China's CNY 25.8 billion online gaming industry.

I. Introduction

In China, a series of regulations have been promulgated to directly govern online gaming, the latest of which is the Interim Measures on the Administration of Online Games (the "Measures") issued by the PRC Ministry of Culture on June 3, 2010, and effective as of August 1, 2010. The Measures expand upon previous legislation regulating online games and provide updated and clearer rules regarding permissible content, market access, game mechanics, administration and supervision from the state, and potential legal liability. Although the Measures include additional requirements for foreign game developers, the basic dynamics of the industry for foreign online game have not drastically changed.

While all online games must obtain government approval before release, domestically produced games face a less complicated road to market than games produced outside of China. However, imported online games that obtained regulatory approval often compete quite successfully with domestic games. As a MMORPG pioneer and major factor in China's online gaming world, World of Warcraft's entry into the Chinese market offers many lessons for all foreign game developers.

Using World of Warcraft's example, this article introduces the issues that foreign game developers will be most interested in and offers a comparison on how the Chinese regulatory environment differs from that of the U.S.

II. Key Issues facing foreign online game developers in China

In considering China's current regulatory regime as a whole, foreign game developers should pay particular attention to the following issues:

  1. Market Access

    Online games, according to the Interim Provisions on the Administration of Internet Culture(the "Interim Provisions"), are categorized as Internet Cultural Products. Literally, these are products whereby the production, dissemination and circulation of which are done through the internet. Creation of Internet Cultural Products and subsequent activities including production, copying, uploading, import, wholesale, retail, broadcasting, lease of such products, and the operation of online games, are all deemed as Internet Cultural Activities. Under the Interim Provisions, Chinese companies seeking to undertake any such Internet Cultural Activities must satisfy certain specific conditions to be empowered to operate on the internet as Internet Cultural Operation Entities. To this end, Internet Cultural Operation Entities for profit need apply to the PRC Ministry of Culture or its local corresponding branch at provincial level for an Internet Cultural Operation License.

    In addition, since developing online games accessible to the public via the internet is regarded as an online game publishing activity , an Internet Cultural Operation Entity seeking to operate online games should also obtain an Internet Publishing Services License issued by the PRC General Administration of Press and Publication covering the service scope of the online game. Meanwhile, those Chinese companies issuing virtual currency and providing transactional services regarding virtual currency in online games for another company need only obtain the Internet Cultural Operation License as they are not actually publishing anything, but do have operations online.

    Foreign online game developers, on the other hand, do not have open access to the Chinese market both in terms of establishing an entity to develop games locally and in the actual hosting and operation of a game produced locally or abroad.

    Under the Catalogue for the Guidance of Foreign Investment Industries and the Catalogue of Prohibited Foreign Investment Industries, "internet cultural operations" fall under a prohibited sector for foreign investment. These restrictions are further reinforced by the Several Opinions on the Introduction of Foreign Capital into Cultural Industry and Decree No.13 – these regulations explicitly forbid foreign entities and individuals from establishing and operating any Internet Cultural Operation Entities to engage in online games operational activities directly or though de facto control . Notably, establishment of Internet Cultural Operation Entities is necessary for both online game development and online game operation although these are distinctly different businesses. As such, foreign companies are not permitted to participate in the development of online games domestically in the form of a commercial establishment.

    As foreign online game developers are banned from developing or operating their games within China on their own, this necessitates a partnership with domestic Chinese enterprises that will obtain the necessary licenses, including the Internet Cultural Operating License and Internet Publishing Services License as well as the import approvals to operate the foreign produced game or jointly developed games. Foreign developers do not deal with such applications themselves as their domestic operator licensee usually undertakes those procedures. The foreign copyright owner of these imported online games typically must grant Chinese online game operators the exclusive right to operate their online games in China. Blizzard Entertainment, for example, owner of the World of Warcraft game works exclusively with Chinese company to distribute, operate and coordinate regulatory approval for the game in China.

  2. Interplay Between Import Examination and Approval Authorities in China

    Typically, once a Chinese distributor has been selected for an imported online game, approval from the two above mentioned Chinese regulators are still required before the game can be launched in China.

    In contrast to the U.S., where there are no direct regulations on the importing of online games, the PRC General Administration of Press and Publication is the authority responsible for examining and approving such games from the "publication" perspective. Even those foreign online games intended for display, demonstration and promotion in exhibitions and events held in China are also deemed as publishing and therefore require formal approval from the PRC General Administration of Press and Publication. In terms of approval of content, the PRC Ministry of Culture believes it is the primary content regulator of online games in China. Foreign developers through their exclusive local distributors intending to import foreign online games are responsible for applying to the PRC Ministry of Culture and must present their Internet Cultural Operation License, among other things, as prescribed in Article 11 of the Measures.

    In reality, both authorities have some role in content review leading to regulatory turf battles. For example, World of Warcraft suspended charging customers throughout part of 2009 as the two authorities jockeyed for regulatory position. While the duties of the aforesaid two authorities regarding online games have been explicitly provided in the "Circular of the PRC State Commission Office for Public Sector Reform on Interpretation of Certain Sections in the 'Three Determine' Program" ("ZHONG YANG BIAN BAN FA [2009] No.35"), the struggle for content regulatory primacy has not been fully resolved as ensuring compliance with Chinese law still requires some degree of review of content on the part of the PRC General Administration of Press and Publication . Since the newly issued Measures reinforced the authority of the PRC Ministry of Culture in approving content in imported online games, the rival between the two authorities may intensify.

  3. Specific Content Regulation
    1. Content regulation in China

      Chapter 3 of the Measures includes restrictions on content that violates the PRC Constitution, harms national sovereignty, calls into question the territorial integrity of the country, divulges State secrets, promotes cults, uses obscenity or pornographic images, and so on. The list also includes catch-alls and restricts content that violates social morals and PRC law. For example, in the past "Command & Conquer: Generals - Zero Hour," a game simulating war, was previously banned for "smearing the image of China and the Chinese army." The Measures also place restrictions on "obligatory hostility" between players and "gambling by using virtual currency or legal tender" for all players.

      Moreover, previously approved imported online games must undergo import procedures again if the games are updated, or new versions and new material were added. When the content of an imported online game is materially altered, the new proposed content must be submitted to the PRC Ministry of Culture for content censorship. In this case, the PRC General Administration of Press and Publication also requires approval of the proposed changes beforehand. More recently, Blizzard Entertainment and NetEase will finally be able to launch Wrath of the Lich King, the add-on expansion for World of Warcraft, in China on August 31, 2010, about 22 months after the expansion launched in the U.S. "The delay was due to the regulatory and content review process." Finally, the Announcement on Regulating Applications for Content Censorship for Imported Online Games makes it clear that games undergoing content censorship should be fully developed and in conformity with the versions officially operated (or in public testing).

    2. Protection of Minors

      Other specific content prohibitions are provided by Chapter 4 of the Measures , many focusing on the protection of minors. Online games intended for minors must not contain content which encourage minors to imitate criminal behavior or are against the interests of society. Content involving horror or cruelty which could impair the physical and mental well-being of minors is also prohibited.

    3. Comparison with Content regulation in the U.S.

      In contrast to China, there is no singular law governing online games in U.S. Instead, distinct areas of internet gaming are governed by the U.S. Constitution, national and state laws, and case law. Generally speaking, video games are protected by the First Amendment freedom of expression and content regulation is generally not permitted. Video games constitute protected "speech" under the U.S. Constitution, particularly given the extensive themes and artistic/literary content included in modern games. However, a rating system for questionable material is generally acceptable. There are a host of applicable state laws that are applicable as in Washington state or New York state. State lawmakers have struggled to define what constitutes a "violent" videogame, and how such determinations should be made. Some have focused on specific acts of violence towards police officers, while others have attempted to use a modified "obscenity" test; focusing on whether the game has serious literary, artistic, political, or scientific value with respect to what is appropriate for minors. However, First Amendment jurisprudence dictates that the government may only regulate the sale and distribution of erotic, as opposed to violent, media. Only when an expressive work crosses a certain line of eroticism will the courts approve restrictions on otherwise protected speech. In contrast, China's regulatory regime is much more stringent and violence and horror are reviewed as well.

    4. Industry Self-Regulation
    5. Going forward, the Measures also establish a system mandating self-examination and active supervision for online game operators. This requires them to employ professionals to examine content and business behaviors to ensure compliance with the law and when the local operator/distributor of an imported online game is replaced by a foreign company, the successor must reapply to the PRC Ministry of Culture for approval.

  4. Online Game Real Name System

    To implement the policy objectives of protecting minors and protecting societal interests, online game operators are required to adopt technical measures to prohibit minors from accessing "inappropriate" games or offending game functions and, in order to prevent minors from excessive play online, operators are also requested to limit playing time for minors.

    Controversy regarding the Internet Real-name System first started in 2002, but this concept still found its way in a series of legislation afterwards, such as the "Online Game Anti-addiction System" and the "Online Shop Real-name system" . The "Online Game Anti-addiction System" is intended to control the playing time of minors and therefore requires that online game users must submit their personal information to complete registration in order to identify which players are minors that need to be protected. In addition, the Legislature intends to have technical measures to be implemented by online game operators that would not only prohibit minors from accessing inappropriate games or game functions, but also be useful in resolving disputes arising out of online games.

    However, the effectiveness of the real name system depends on how it is implemented. Challenges include the technical restraints of online game operators and simple lack of incentives for implementation by the operators. Enforceability of this system is also expected to be quite poor as users may just use another person's identification certificate, fabricate information, or even login to overseas online game servers via proxy IPs. According to the Measures, online game operators are responsible for collecting and keeping the personal information submitted by online game users , so how to protect this information and avoid leaks is a major concern for most online netizens.

    There is no legal requirement for registering real names and IDs in online games in the U.S. The U.S. Supreme Court has found the concept of "privacy" to be protected by a number of the Amendments, typically known as a "penumbra right". Thus, there are no legal requirements requiring use of any real names for internet games, although occasionally individual companies may require it. Past experience, however, has shown that most gamers stage a revolt when one is suggested by individual companies. On July 6, 2010, for example, Blizzard Entertainment announced that it will display the real names tied to user accounts in its game forums. Blizzard Entertainment, with Facebook, agreed to allow Facebook friends to share their real identity. The integration of this feature has created a major uproar among the fans of the game and was eventually cancelled.

III. Conclusion

Compared with that of the U.S. and other jurisdictions, China has a markedly more stringent regime for governing online video games. Greater restrictions are placed on market access, content, and what is permissible for minors. The policy behind this is to protect domestic political and societal interests. Special care and attention should be placed on the selection of the Chinese licensee, working with them to obtain content and import approval, the protection of minors, and instituting the required technical requirements. The alternative is to face bans or long delays. However, foreign game developers are able to operate and take advantage of China's massive online community by playing by its rules.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.