New Year's bad: dozens of Russian games will be removed from the Chinese App Store

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On January 1, applications that do not comply with the legislation of the Middle Kingdom will disappear from the store

In early December, Russian mobile game developers began to receive warnings from Apple that by January 1, 2021, they must obtain licenses for their products from the press and press office of China. Otherwise, the applications will be removed from the version of the App Store for that country, the company said in a letter. It is impossible to obtain a license in such a short time, experts interviewed by Izvestia say. Dozens of Russian developers risk losing tens of millions of dollars due to the removal of mobile games from the Chinese App Store.

Experts note that Apple itself will benefit mainly from the innovation.

Disappointing gift

The text of the notification from Apple was shared by one of the members of the closed Russian-speaking community of representatives of the gaming industry InGameDev. “As you probably know, Chinese law requires games to have a ratification number from the Press and Press Office. To keep your paid game or micropayment game available in mainland China, enter this number and download the supporting documentation in the information section on your game's page in App Store Connect, ”the company said in a letter to the developers that Izvestia read. If the developer does not fulfill the requirement, after December 31, the application will disappear from the "apple" store of the Middle Kingdom until the company submits a license, Apple said in a statement.

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The law, according to which paid mobile games (and free with paid options) cannot be published without an International Standard Book Number (ISBN), was passed in China back in 2016. Initially, the rule applied only to Chinese stores of Android applications - analogs of the Google Play blocked in the country. But in 2020, the rule began to apply to the App Store as well. At the same time, the question arose about the fate of projects without ISBNs, which got into the app store before the restrictions were introduced. In July, developers from all over the world began receiving notifications from Apple with the same text that we provided above. Only the deadline was different - until August 1. By the end of the first week of August, applications began to disappear from the Chinese App Store: according to Niko Partners, about 40 thousand games.

Apple did not promptly respond to a request from Izvestia why applications from Russian developers are still in the store and, therefore, they received a warning later.

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To obtain an ISBN, a Russian game developer needs to find a partner in China, make a national version of the game, send it for verification to the Chinese department and wait for permission, said Maxim Fomichev, producer of Pixonic. But in reality, the procedure is more complicated, he said.

- There are a huge number of explicit and unspoken requirements both in the field of cultural studies and in terms of individual technological solutions. For example, in addition to the well-known dislike of the Chinese for skulls, bones and blood in games, it is not recommended to use religious symbols and images, as well as references to the historical realities of World War II. There are many such examples, and they are supplemented with enviable regularity. You can only learn about them from a partner, - said the expert.

Pixonic has been trying to get an ISBN for its War Robots game since 2018, said Maxim Fomichev.

The requirement to obtain a license in a month looks like a mockery, said Alexei Tishakov, marketing director at ZiMAD.

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- Previously, on average, it was possible to keep within 9-12 months. And now, Chinese partners cannot guarantee a license in less than 18 months. And this is taking into account the fact that you will collect and prepare all the documents, - says the specialist.

In addition to bureaucratic difficulties, there is still a limit on the number of licenses against the background of high competition from local players, said Alexey Tishakov. For example, in 2019, the Chinese department issued about 2,000 ISBNs, of which 90% went to Chinese developers, he said.

Regulation in the Middle Kingdom is focused primarily on supporting local developers, agrees Neskin Games co-founder Valentin Merzlikin. Even in the case of a partnership with a Chinese company, the foreign part of the joint venture still loses, he said.

- Most of the successful releases of Western and Russian games in the Chinese market take place with the help of local publishers. Even if the licensing process for the game is called a strategic partnership, 50-70% of the game income earned in China will remain in China, ”said Valentin Merzlikin.

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Probably, applications of a couple of dozen domestic studios will fall under the restrictions, Valentin Merzlikin suggested.

- On average, developers from Russia and the CIS will incur no more than 10–20% loss. China is a priority market, but not yet as clear and responsive as the United States. Also, many companies do not waste time and are looking for other countries to replace China, - said Alexey Tishakov from ZiMAD.

The loss of revenue from the Chinese market is a painful blow for game studios from Russia, but not fatal, said Maxim Fomichev.

The company does not disclose information about the profit. According to the analyst company Sensor Tower, ZiMAD's monthly revenue is about $ 300 thousand, or $ 3.6 million per year. Consequently, in the event of the departure of their games from the Chinese version of the App Store, the studio's annual profit may decrease by $ 360-720 thousand. Pixonic's revenue is approximately $ 7 million per month, or $ 84 million per year. Due to the new rules in 2021, the company may miss about $ 8.4-16.8 million.

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As part of the second package of measures to support the IT industry, intergovernmental negotiations between the Russian Federation and the PRC on simplifying access to the Chinese market for Russian developers are also considered, the media reported earlier. This and other proposals for the gaming industry were lobbied by the vice-president of Mail.ru Group Vladimir Gabrielyan.

The entire community of Russian mobile game developers is waiting for a simplified entry into the Chinese market, said Maxim Fomichev.

“In my opinion, this is one of the most interesting and non-trivial proposals for supporting the gaming industry that I have heard over the past 10 years,” the expert commented.

Mail.ru Group did not answer Izvestia's question about whether the intergovernmental negotiations meant a discussion of an easier way to obtain an ISBN. At the time of publication, the Russian embassy of the PRC also did not provide comments.

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