The government notice regarding online game product & industry regulation from GAPP(20091010)
Chinese Official link:
http://www.gapp.gov.cn/cms/html/21/508/200910/466283.html
English translation and Horace’s analysis(in blue):
1. Definition. Online game concept in this notice include all game products that offer public download or access for interactive entertainment experience, including but not limited to MMORPG, webpage games, casual games, single player games containing online experience, LAN games, online player vs. player games, cellphone games.
Imported online games means games developed by foreign company/developer, owned by original IP creator, authorized and licensed to China publishers for operation.
2. Offering public access or download to game content for interactive experience is publishing activity. Such publishing activity should acquire prior approval according to national regulation. GAPP is the exclusive governing authority for such approval application. None other department have right to approve such publishing activity.
Without prior approval, organization or individual are not allowed to operate online game business. GAPP will crack down unapproved operator in coordinating with ISP & Data center to revoke their ICP license, and notify related commercial administration to revoke their business license
Unapproved online games are not allowed to be published online. Network operator (like China Telecom and China Netcom) should not provide server hosting or internet bandwidth to such products. Online games approved by GAPP can be published and other department are not allowed to censor them again. Cultural and Telecom regulators should regulate the online games’ content according to GAPP’s approval result.
If any unapproved online games got published or approved online games modify its content after the censorship, GAPP have the right to notify its local branches to ban the operation.
(Horace: GAPP is extending its regulating scope from traditional MMOs to all games operates on internet, based on cable internet, LAN or wireless. It’s the first time in GAPP’s formal notice that they included web games and mobile phone games into their governing scope. Even the games in App Store of iPhone, which will be introduced to China by China Unicom in 2009 Q4, will need to be censored by GAPP before publishing. That’s crazy….Such aggressive move will definitely interfere with other central government department and make national owned telecommunication currier unhappy. This definition is too wide for GAPP to regulate, they don’t have qualified staff with required expertise to do the job. They are just claiming more territory for bribe, frankly speaking.)
3. GAPP is the exclusive governing department for imported online game censorship. All imported game should acquire copyright owners’ authorization/license before publishing. Copyright owner should also certified their ownership of the online games. Once the license deal got <Approval of the IP license deal> from copyright administration department, the deal should be submitted to province level publishing regulator. If the province level publishing regulator approved the product, the case will be escalate to GAPP for final approval.
Without GAPP’s approval, entities that providing operation service for imported online games, or conducting marketing/promotion service for foreign online games(i.e.: games that hosted in foreign territories), will be cracked down by local news & publishing regulators. Related service will be terminated, internet bandwidth access will be cut off by telecommunication authorities, websites will be shut down.
Operating imported games without original copyright’s license will be defined as illegal piracy activity. GAPP will cooperate with telecommunication, commercial regulator to crack down such activities according to <COPYRIGHT LAW OF THE PEOPLE’S REPUBLIC OF CHINA> and <Ordinance on the Protection of the Right to Network Dissemination of Information>. Suspected criminal will be submitted to public security department.
(Horace: again, GAPP is reiterating its exclusive governing authority for imported online games. They are afraid of losing the war with Ministry of Culture. Well yes, in latest regulation authority definition from central government, after 2010 GAPP will still remain as exclusive organization can give prior approval to imported/licensed games, but Ministry of Culture will take over all the day to day industry/market regulation responsibilities.)
4. Foreign enterprises are not allowed to provide online game operation in China market in forms of WOFE, joint venture or so-called cooperation. Foreign enterprises are not allowed to indirectly control domestic companies that providing online game operation service, by means of forming joint venture company or signing technical support contract/agreement. Foreign enterprises are not allowed to indirectly control or participate online games operation business by importing user billing, account management, credit points data to their own platform. GAPP will crack down such activities in cooperation with other national departments. In severe cases, involved entities’ license will be revoked.
(Horace: this is hidden rule in China gaming business since its beginning, this time they formally announce it. It’s also an answer to the9’s accusal to Netease and Blizzard’s under table deal for the WoW license transfer. i.e.: there are facts indicating Netease is using complicated investment/capital structure to let Blizzard participate the operation of WoW and coming Battle.net in China.)
5. Approved online games should reapply prior approval from GAPP if the game’s publisher changed. The game operation should stop from the date that publisher changed till the game got approval from GAPP. In this period, any operation activity will be viewed as illegal online publishing.
6. For approved online games, all new version, new expansion or updates should apply for prior approval from GAPP. Without prior approval, all new versions, new expansions or updates are not allowed for launching. Approval paper for involved games, which violate this rule, will be revoked by GAPP. Publishers that launch unapproved new version, expansion or updates contain illegal content, will be treated with special attention. Related government department will be notified to disconnect their internet access, shut down their website.
(Horace: this is absolutely unrealistic. There are about 300 online games are running in China. There are hundreds of updates, patches and expansions launched every month. For each application, the usual censorship period is 20 work days. How can GAPP handle such big number of application? If they really want it, they will need to hire thousands of game censor specialist working 24X7 in a huge office. So this clause is just specifically designed for big titles like WoW who has millions of user across China. As far as I know, no other games need to submit prior-approval application to GAPP for updates before or after this notice published)
All local news & publishing, copyright administration departments, should notify local departments, enterprises regarding above regulation. Besides, a focused regulating campaign will be launched in October to crack down illegal activities in the market.
