One of Donald Trump’s last actions as President may still jeopardise the future prospects of our flourishing global games industry.
This goes deeper than policy.
This is a story of Presidential hissy fits and diplomatic mistrust on a scale that puts the cherished values of the global games industry on the line.
Before the Trump administration’s intervention, Chinese and Western developers had been enjoying closer ties; both increasingly depend on each other for the production of games and their marketing too.
While the West is heavily reliant on Chinese production services, China in turn has started to use Western-focused marketing services as they extend their reach beyond their own domestic market.
But on August 5th, 2020, everything changed.
Mike Pompeo, U.S. Secretary of State, made a major announcement on US policy. It was an announcement that attacked the very spirit of the gaming community.
Games are synonymous with community, friendship, and connectivity. The new policy detailed restrictive practices with the power to attack those values at the heart of the industry we cherish. (More of those details shortly.)
Another Trump Hissy Fit?
With Trump, it was personal. The new policy was revealed a few weeks following Trump’s humiliation at the hands of U.S. TikTok users. They successfully used the platform to encourage K-Pop fans to apply for free tickets to a Trump rally in Tulsa, despite no intention to attend.
The result was a sparsely attended Trump rally with an abysmal turnout that made the president look far from popular.
In response, Trump threatened to have the app banned. It was a further escalation of his war on both domestic social media platforms and his trade war with China.
What is The Clean Network? And why is it a problem?
And then, soon afterwards, came Pompeo’s August announcement. He revealed a policy initiative called ‘The Clean Network’. It was Trump’s response to alleged third party interference in online security.
The Clean Network program is the Trump Administration’s comprehensive approach to safeguarding the nation’s assets including citizens’ privacy and companies’ most sensitive information from aggressive intrusions by malign actors, such as the Chinese Communist Party.
The Clean Network addresses the long-term threat to data privacy, security, human rights and principled collaboration posed to the free world from authoritarian malign actors. The Clean Network is rooted in internationally accepted digital trust standards. It represents the execution of a multi-year, all-of-government, enduring strategy, built on a coalition of trusted partners, and based on rapidly changing technology and economics of global markets.
The Clean Network’s aim is to purge some of the biggest Chinese apps from U.S. digital stores. This includes some of the biggest social apps, such as WeChat and TikTok; and some of the biggest games too.
The U.S. claims these apps are backdoor information-gathering tools, with the developers of WeChat and TikTok (Tencent and Bytedance respectively) both sharing their data with the Chinese Communist Party (CCP). The Chinese authorities deny this.
The Clean Network reality for the games industry is a raft of restrictions with the potential to have a major impact on its future.
But with potential restrictions looming, it’s understandable that Chinese developers are nervous about planned campaigns on the U.S. market.
Yes, Chinese games developers reliant on success in the West have most to lose. But many suppliers in the West are vulnerable too, as REALTIME has already witnessed, with at least one major project falling through as a direct response to the policy.
And the real losers in all of this? The gamers themselves.
How bad might it get?
Despite the fanfare of the policy announcement, it’s still difficult to predict precisely how The Clean Network might be implemented.
What do we know?
We know that video games are amongst the most popular Chinese apps in U.S. digital stores. It makes sense to expect the policy will cast a long shadow over some of the most successful Chinese publishers.
And then there’s WeChat.
Attendees to ChinaJoy, one of the world’s biggest annual games industry events in Shanghai, will understand just how big WeChat actually is. While its popularity is mainly confined to China itself, it’s worldwide influence is growing.
China’s biggest social platform is the world’s most popular app. One billion monthly active users enjoy everything from text messaging, calls, digital payment, file and location sharing, and video games.
For Chinese living outside of China, it is the primary means of keeping in touch with family and business partners from the East to the West. While the banning of the app in U.S. stores came as a surprise to some, given its comparatively low use in America, it still remains a major blow to business relations between East and West.
Important yet divisive: The Chinese Conundrum
Shenzhen-based Tencent is by far the World’s largest games publisher. It has extensive interests across both continents and publishes some of the world’s biggest games.
One of Tencent’s most popular games is the combat survival game PUBG Mobile. It is hugely popular in the U.S in particular making It is one of the top ten highest grossing mobile games of all time. Estimated earnings are way over $3.6 billion USD.
Thanks to its own government’s restrictions on the grounds of ‘myopia’ and ‘addiction’, Chinese publishers have become increasingly reliant on non-domestic markets to offset any risks to its business.
It led to Chinese developers specifically developing games that will appeal to more international markets. Some developers have secured Western IPs such as ‘Game of Thrones’ to build a game around. Yoozoo, developer of the mobile title ‘Game of Thrones: Winter is Coming’, acknowledges that sales outside of China account for 60% of its revenue.
To further muddy the waters of the debate, China is hardly a champion of Games Industry values itself. It is very selective about which games are permitted to be sold on its shores. Games can only be published with the correct Government licence. They clamp down hard on anything that might be perceived as a threat.
Even the innocent-looking cutesy Nintendo game ‘Animal Crossing: New Horizons’ found itself slapped with a ban after players were found to be using it to share pro-democracy messages.
Further still, in April, the CCP banned Chinese players from playing with their peers overseas or even chatting with them.
Optimism in spite of it all
With such draconian restrictions, it might be that the Clean Network policy proves to be the U.S’s attempt to level the playing field. This is a trademark of the outgoing Trump administration which had other prime-movers in its sights too.
Huawei is perceived as a ‘national threat’ by the U.S. government. Its strong stance on the Chinese-based communications technology provider has been highly influential in ensuring that many of its allies, the UK included, don’t use its products or service ahead of building their respective 5G networks.
If the U.S’s intent is that its allies should follow its lead, then there is a possibility that the Chinese video games industry could soon take a huge hit too.
The 2020 U.S. election was one of the biggest moments in the country’s history, and its result will have ramifications across the globe.
We have already seen how the Trump administration’s ‘Clean Network’ program has negatively impacted companies in the West (ourselves included) who have sought to have closer ties with publishers in the Chinese market.
Our Simple REALTIME Plea
Our simple plea to a new more-globalised US administration under Biden is to take a fresh view of Trump’s broad-brush prohibitive digital security policies.
And, as a matter of urgency, we want him to revisit and better understand how closer collaboration between countries can improve the Games Industry for everyone.
If you would like to discuss marketing for your upcoming release, wherever you are in the world, feel free to reach out to me at email@example.com.