Loophole that Allowed Unlicensed Apps on the Chinese App Store Closes

By Bill Toulas / June 22, 2020

Having unlicensed games in the Chinese app store was a matter of dynamics thus far. Users wanted them, the app developers wanted to stay present on the world’s second most profitable market (after the US), and Apple was happy to receive its 30% cut from all in-app purchases. However, to do it while still playing by the book, Apple “invented” a rule that kept the apps alive until the Chinese authorities decided on the fate of each game title. As the censorship office in China is pretty busy, they are not quick to clear out pending items such as the reviewal of App Store games, and so the titles remained available indefinitely unless the government targeted them specifically.

This practice, however, will now come to an end, as the Chinese will not allow any more of this “fooling around”. Those who want to see their apps on the Chinese App Store will have to get a license, starting in July. Those who don’t have authorization from the country’s regulatory office won’t have the legal right to be on the Chinese market, and so there won’t be any grace or waiting period for them to hide behind.

Right now, there are about 20,000 apps in the Chinese iOS App Store that don’t possess a license from the regulator. These companies will now have to do one of the following two things: a.) censor their game content, b.) say goodbye to their second-biggest source of revenue. In some cases, censoring the app means fundamentally changing it, so this will be hard for some. Even then, nobody can guarantee that you’ll ever get a license from the Chinese authorities, so the situation is tightening. Two of the most notable game titles that are under great trouble due to this change are Grand Theft Auto and Plague Inc.

The Chinese Tencent and NetEase have learned how to play this game and don’t have any trouble meeting the censorship demands. For this reason, we may see some franchises being rented to the Chinese game publishing giants as a way to get a license and stay alive in the market. For smaller app developers, though, this won’t be an option, so we can say they’re out of luck. As for what Apple is doing, the truth is they can’t do a lot about the whole situation. They have a history of complying with the Chinese government demands whatever these may be from time to time, and even if it means missing revenue, they will undoubtedly enforce the new guidelines with zeal.

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