Fortnite Chinese servers shut as Beijing tightens regulations

Three years after the launch, Tencent, an Epic Games investor and Fortnite’s local publisher, has shut down the Fortnite game servers in China, as Beijing tries to intensify regulations.

Tencent sought to replicate the global success of the game in its home country. In three years trial, the game never generated profits to Tencent as it could be played in a “test” mode only with limited monetization options. The Shenzhen-based Chinese giant is a significant investor in Epic Games, owning a 40% stake in the firm.

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Video game publishers need to obtain government approvals to premiere and sell copies or virtual items in China. The licensing regime, especially for the battle royale genre is increasingly stringent. This year has been particularly difficult—the government hasn’t authorized a new gaming release in more than 100 days, as per a report on Bloomberg. In August, China introduced even stringent controls over gaming, with the government limiting the time minors can play online to just three hours per week.

The Chinese gaming market was worth $44 billion last year and will be worth $46 billion in 2021, vs. $43 billion in North America, according to research company Newzoo. In 2020 regulators issued licenses to 1,400 new games, of which fewer than a hundred were imported from other countries compared to more than 9,000 licenses in 2017. Western titles are heavily censored with blood being removed from the games.

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Since 2018, the number of new game licenses have been significantly reduced. Fortnite was able to win approval for a trial launch in 2018, but Tencent failed to get approval for a full commercial version.