China Bans All Foreign Investment in its Virtual Worlds

Gold-farming-china-wow7go-530 This morning's policy report is a depressing follow-up to our recent story on how Brazil is aiming to join the ranks of major virtual world hubs.

China's General Administration of Press and Publication, the state's official video game regulatory body, announced today its intent to bar all foreign investment and partnership in Chinese virtual worlds and online games.

It appears Chinese gamers will be seeing Red for the forseeable future.

State Fingers in Virtual Coffers

From the article:

The ban covers companies taking outright stakes, seeking to create JVs
and co-ops, and even “influencing” Chinese gaming companies by offering
technical support.

GAPP official Kou Xiawei said China is enforcing the
ban because foreign companies had increasingly been causing “serious
market disorders” by illegally entering the gaming market

The Chinese government is historically wary of any perceived foreign influence over its closely-controlled consumer media. Remember how China's government censors harangued the mighty Google into modifying its search results? Consider this a means of limiting the reach of the Metaverse to areas deemed "safe" by Chinese officials.

Why are the Chinese so interested in foreign partnerships when the influx of money would do much to stabilize China's fluctuating, recession-smacked economy? The same reason China has torpedoed foreign IPOs and rolled back partnership agreements in the past: It's all a matter of control.

Controlling the Metaverse

The powerful Chinese Communists are wary of the free flow of information allowed by virtual worlds. As far back as 2004, the government's censors took action against online games depicting Tibet as an independent nation. Virtual worlds allow a free flow of information around traditional Chinese print and broadcast censors, and the Chinese are not willing to risk a threat to their information monopoly.

Even homegrown protests are quickly shut down. Government censors opted to shut down an entire online world after Chinese gamers protested a major change to the popular Asian online game 'Hot Blodded Legend'. As China learned from its own real-world unrest, allowing even minor protests time to grow means big trouble for the central government.

What China's Brash Move Means

The current lockdown on foreign investment raises questions for companies with existing operations in China. More importantly, if China is willing to take steps to exclude the world from developing possible 'subversive content' into online games via commercial partnerships, what does this mean for China's future involvement in the booming online gaming industry?

Potential partners are certainly rethinking future dealings with China, especially if currently involved players lose rights to projects already in development. China's actions do more than harm collaboration and free expression in the Metaverse – they threaten to poison the atmosphere of cooperation necessary for large-scale standardization and acceptance of the virtual world.

3 thoughts on “China Bans All Foreign Investment in its Virtual Worlds”

  1. It’s about time Americans realised that China – and India – are in charge of the world game now and Western values are not Chinese or Indian values. Max, being from a nation which owes $800 billion to China, its about time you got off your high horse and accepted that the Chinese can do what they like. There is no point to pissing into the wind: all one gets is blow back. Max, you have your way – they have theirs. And doesn’t the US Government dictate to its socalled “free” gamin industry and MUVES – ie gambling, porn etc.

Comments are closed.