Politics

Why Is China So Interested in the Video Game Industry?

Holiday greetings. If you are one of the world’s 3 billion video gamers, you already know that gaming consoles are the perfect present—so perfect that retailers are struggling to keep up with demand this holiday season. Delays, not to mention the global semiconductor chip shortage, have affected the production of nearly every digital gadget. Long before Black Friday, retailers had to warn consumers that many consoles could quickly sell out, leaving many shoppers disappointed. But the world of video games faces more menacing geopolitics than supply chain disruptions.

Last year, gaming industry revenues were estimated at $159.3 billion, a 9.3 percent increase over 2019. The boom wasn’t just because the coronavirus pandemic forced people to stay home: Gaming studios are turning out increasingly sophisticated entertainment. It should come as no surprise that Chinese behemoths such as Tencent have started paying considerable attention, especially to the West’s successful studios. In fact, they are buying many of them. On just one day in July, Tencent acquired two gaming firms: one British and one Swedish.

That may seem like just business, but many video games include strong political content, even if their only mission is to entertain players. Games feature endless variations on fights between good and evil. Unsurprisingly, many espouse Western values such as democracy and free speech—simply because their creators live in societies where such things are taken for granted.

Holiday greetings. If you are one of the world’s 3 billion video gamers, you already know that gaming consoles are the perfect present—so perfect that retailers are struggling to keep up with demand this holiday season. Delays, not to mention the global semiconductor chip shortage, have affected the production of nearly every digital gadget. Long before Black Friday, retailers had to warn consumers that many consoles could quickly sell out, leaving many shoppers disappointed. But the world of video games faces more menacing geopolitics than supply chain disruptions.

Last year, gaming industry revenues were estimated at $159.3 billion, a 9.3 percent increase over 2019. The boom wasn’t just because the coronavirus pandemic forced people to stay home: Gaming studios are turning out increasingly sophisticated entertainment. It should come as no surprise that Chinese behemoths such as Tencent have started paying considerable attention, especially to the West’s successful studios. In fact, they are buying many of them. On just one day in July, Tencent acquired two gaming firms: one British and one Swedish.

That may seem like just business, but many video games include strong political content, even if their only mission is to entertain players. Games feature endless variations on fights between good and evil. Unsurprisingly, many espouse Western values such as democracy and free speech—simply because their creators live in societies where such things are taken for granted.

China’s increasing interest in video games brings lots of cash, but it’s bad news for the global gaming industry, particularly when it comes to artistic freedom. “The Chinese companies that invest in or acquire firms here are perfectly reasonable. But there’s concern regarding the fact that the Chinese government can force them into cooperation under the 2017 National Intelligence Law,” said Per Stromback, the spokesperson for the Swedish Games Industry, a trade association. The law broadly stipulates that “any organization or citizen shall support, assist, and cooperate with state intelligence work according to law.”

And if they don’t want to? The state can demand it. That may explain why the longtime sponsor of a competition for video game creators backed out this year. A source close to the organizers of the competition told me that the sponsor feared that the winning entry might offend Beijing and it didn’t want to be held accountable for the game’s content—or the consequences in the Chinese market. Video game studios acquired by Chinese firms also feel pressure to adjust their content for Chinese values.

This spring, the Chinese government tried a rather unconventional method to homogenize global video games. It introduced a motion at the International Organization for Standardization (ISO), which regulates goods from camera film to car seats, to approach video games in the same manner. The application only concerned technical standards: The ISO does not concern itself with artistic content. But Beijing clearly intended to get video games to be treated as a technical product rather than an artistic one. That could lead to member organizations, such as China’s, using the international body to lodge complaints against video games it disapproves of.

The Swedish Games Industry rebelled against the move, using its influence gained from Sweden’s outsized success in the market. “We said, ‘Video games are art. Regulating them in the same manner as lightbulbs would curtail the creators’ freedom,’” Stromback told Foreign Policy. “Successful video game export requires freedom of speech.”

The Swedish Games Industry encouraged ISO members to vote against China’s motion for regulation. The motion was voted down, but Beijing’s effort caused anxiety across the industry. One country’s industry association even felt it prudent to consult with a member company’s Chinese owners before voting against the motion. Meanwhile, the Committee on Foreign Investment in the United States, the U.S. regulator that scrutinizes acquisitions on national security grounds, had already launched an investigation into Tencent’s takeover of Sumo, the British video game studio it acquired in July.

Even those who don’t play video games should be concerned about authoritarian governments taking an interest in the industry. Because most officials in authoritarian countries aren’t exactly skilled gamers, video games are a rare corner of the internet where people residing in those countries can express ideas that could get them in trouble offline. “If I were a dictator, I’d definitely want to keep the video game industry under tight control,” said Erik Robertson, a longtime video game creator who leads the biannual Nordic Game conference.

Accelerating geopolitical confrontation feels particularly acute for the video game industry, with its fictional wars, heroes, and villains of sundry nationalities. Beijing’s recent restrictions on the amount of time minors can spend playing video games—part of a wider crackdown on technology giants—haven’t undermined Chinese firms’ global power. On the contrary, the reduced playing time means companies can’t just count on the domestic market. But the Chinese tech industry remains careful not to upset the government. In September, for example, China’s gaming industry association announced that its members would boycott “politically harmful” content, among other such content deemed harmful or inappropriate.

Video game creators around the world must now try to divine what constitutes politically harmful content. It’s easy to see where that will lead: Creators will play it safe for fear of displeasing Chinese authorities and would-be buyers, which is certain to result in less thrilling content. Assassin’s Creed II’s protagonist, Ezio Auditore, at one point says, “Wanting something does not give you the right to have it.” Auditore lives in Renaissance-era Italy, but an authoritarian regime might take his comment as a reflection of contemporary geopolitics. It could, for example, be interpreted as a reference to the fact that China has no right to take Taiwan. Imagine video game creators’ agony as they try to create new versions of Assassin’s Creed, and indeed other games, without running afoul of overzealous Chinese officials’ sensibilities.

What if gamers in authoritarian countries feel that their corner of the internet is no longer a vestige of freedom? The last few months show that the 21st-century gaming industry is about to be put to the test. In fact, those planning to spend the holidays fighting various villains could begin assessing the changing market by discreetly disseminating messages regarding the plight of the Uyghurs, Taiwan, or Peng Shuai.



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