Special Declaration: This article is an original work by Attorney Shao Shiwei. It represents only the personal views of the author and does not constitute legal consultation or legal advice on specific matters. For article reprints, legal consultations, or business exchanges, please add: sswls66
Introduction:
It appears to be a consensus in the gaming industry that mid-to-heavy games with in-app purchases and paid features require a game license, whereas casual games without in-app purchases or payments temporarily do not.
However, in practice, such as in two cases published in 2022 on the official website of the Zhaoqing City Anti-Pornography and Illegal Publications Office in Guangdong Province, the three penalized games had no in-app purchases and relied solely on advertising for monetization. It is reported that1, for several casual game products of the enterprises involved,the share of advertising revenue received was only RMB 114, yet they were fined RMB 5,000.
Therefore, do free games without in-app purchases (such as mini-program games, H5 games, games in public beta testing, casual games, etc.) actually need to obtain a game license? This is a question that game operators generally need to pay attention to.
Author of this article: Attorney Shao Shiwei
01
In Principle: Online Network Games Require a Game License for Operation
1. Legal Provisions
Based on the following regulations, it can be seen that online games (including mobile games) must obtain a game license before they can be launched and operated.
February 4, 2016: Provisions on the Administration of Online Publishing Services
Article 27: Before online games are published on the internet, an application must be submitted to the publishing administrative department of the province, autonomous region, or municipality directly under the Central Government where the entity is located. After review and approval, it shall be reported to the State Administration of Press, Publication, Radio, Film and Television for approval.
May 24, 2016: Notice on the Administration of Mobile Game Publishing Services
Article 1: The mobile game publishing services referred to in this Notice mean the act of providing mobile games to the public via information networks for download or online interactive use, and other online publishing and operation services.
Furthermore, if a company has obtained a license for one category of games but wishes to develop games in other categories, it must still apply for a license. For example, if a company has obtained a game license for the PC client category, it must also apply for a game license when developing the same game for mobile APPs, H5, game consoles, and other categories.
For instance, Genshin Impact applied separately for game licenses in three different categories: client, game console, and mobile.
2. Does the Public Beta Phase of a Game, During Which No Fees Are Charged, Exempt It from the License Requirement?
First, let us review the legal provisions. According to Article 27 of the Provisions on the Administration of Online Publishing Services mentioned above, we can conclude that even if there are no in-app purchases in the game, a license is required as long as it is published online.
Additionally, according to the Notice on the Administration of Mobile Game Publishing Services mentioned below, puzzle and casual mobile games still require approval and issuance of a game license before public beta testing, not to mention large-scale mid-to-heavy games.
Notice on the Administration of Mobile Game Publishing Services
III. Applications for publishing... and other domestically produced puzzle and casual mobile games shall be handled in accordance with the following requirements:
(1) Game publishing service units shall, in accordance with the Regulations on the Administration of Publication, the Provisions on the Administration of Online Publishing Services, and other requirements, and by referring to the Mobile Game Content Specifications formulated by the China Audio-video and Digital Publishing Association, review the content of the mobile games applied for publication, fill out the Application Form for Publishing Domestically Produced Mobile Game Works (see Appendix), and submit this form along with copies of relevant licenses and certificates (in duplicate) to the local provincial publishing administrative department at least 20 working days before the scheduled online publication (public beta, hereinafter the same) and operation.
(3) Within 10 working days of receiving the materials submitted by the provincial publishing administrative department, the State Administration of Press, Publication, Radio, Film and Television shall make a decision on whether to approve the application and notify the provincial publishing administrative department of the decision.
Some may argue, for example, that Tencent's game PUBG Mobile: Exhilarating Battlefield did not have a license and claimed to be open only for public beta, yet faced no consequences. It can only be said that not all acts violating legal provisions are penalized; this is reality.
If game companies are unwilling to bear the potential risk of administrative penalties, it is recommended to obtain a license before conducting public beta testing.
02
Special Provision: Mini-Program Games Without In-App Purchases Only Require Filing
1. Legal Provisions
Game payment models mainly include one-time purchase, IAA (Advertising Revenue), IAP (In-App Purchase), and IAA+IAP (Hybrid Monetization of Advertising + In-App Purchases).
On April 10, 2019, the National Press and Publication Administration confirmed at a special meeting on national game management that mini-program games also need to apply for a license
before they can be launched and operated. For IAA mini-games without in-app purchase monetization, filing with the provincial bureau is required within 10 working days from the date of launch.
On August 8, 2023, the Ministry of Industry and Information Technology issued the Notice on Carrying Out the Filing of Mobile Internet Applications, requiring App sponsors engaged in internet information services to perform filing procedures in accordance with regulations. Those who fail to complete the filing procedures shall not engage in APP internet information services.
Following the issuance of the MIIT notice, on August 9, 2023, the WeChat platform also announced that "Starting from September 1, WeChat Mini Programs must complete filing before they can be listed; if WeChat Mini Programs are already listed, they must complete filing by March 31, 2024. Those failing to complete filing by the deadline will be subject to removal starting from April 1, 2024."
On August 30, 2023, the Guangdong Provincial Press and Publication Bureau issued the Notice on Further Regulating the Filing of Domestically Produced Game Mini-Programs
clarifying that mini-program games eligible for filing with the Guangdong Provincial Press and Publication Bureau include interactive games developed based on software open platform interfaces that users can use without installation, such as various mini-programs and quick apps. Furthermore, these game mini-programs must simultaneously meet the following conditions: (1) They have no online publication number, no in-app purchases, and no recharge functions; (2) The copyright owner or developer must be a Chinese citizen or a domestic enterprise, with the copyright owner determined by the Computer Software Copyright Registration Certificate issued by the National Copyright Administration of the People's Republic of China).
2. Practical Situations
① Listing Free Games Does Not Necessarily Require a License
From the perspective of platform rules of major app stores, free games are not strictly required by law to provide a game license (app store platforms update rapidly; examples are provided here for illustration, and game developers should refer to the latest platform rules).
For example, the Apple App Store was reported by domestic media in September 20232to have listed multiple games without licenses, some of which even conducted recharge businesses.
Furthermore, the Tencent Open Platform mentions that games without in-app purchases and without a license can apply for listing by providing a letter of commitment for non-billing cooperation.
②Mini-Games Without In-App Purchases Penalized for Lack of License
According to the Basic Requirements for Game Distribution and Promotion (Draft for Comments) released by the China Audio-video and Digital Publishing Association in March 2023, a distinction is made between online games and simple games (those with no storyline or simple plots, and casual games with no charging settings). For simple games, only filing is required.
However, looking at the cases published in Zhaoqing, Guangdong in 2022, the games involved were all casual games with simple gameplay, no in-app purchases, relying entirely on advertising for monetization, yet they were administratively penalized for failing to obtain a game license.
03
Concluding Remarks
Through the analysis in this article, it can be seen that the question of whether free games need a license for launch is not something that can be clarified in just one or two sentences. In theory, to ensure compliance, one should strictly adhere to legal provisions. However, in practice, there are indeed instances where IAA mini-games without in-app purchase monetization have been administratively penalized, while at the same time, many free/paid games without licenses, which clearly violate legal provisions, are able to launch and operate without issue. This truly gives game developers a headache.
The legal consequences of failing to obtain a game license range from administrative penalties, where fines of 5 to 10 times the illegal business turnover may be imposed according to regulations, to being classified as the crime of illegal business operations in severe cases.
Therefore, the conservative advice Attorney Shao can offer is to strive to obtain a game license before launching and operating. If operating IAA mini-games, it is also necessary to timely understand the current latest laws, regulations, and policies in China, as well as the platform rules of major app stores, reasonably assess your own risks, and prevent violations and penalties.
Additionally, expanding games overseas is another option to address the challenge of lacking a license. Although it may not be a perfect solution, it is better than the anxiety of operating "naked" without a license in the domestic market.
1. "Issue 294" Advertising Revenue of RMB 114, Fined RMB 5,000: This Is the True Winter of the Gaming Industry https://baijiahao.baidu.com/s?id=1739699395121821147&wfr=spider&for=pc
2. Games Without Licenses Illegally Listed on Apple App Store: Loopholes Remain Under Strict Anti-Addiction Management https://mp.weixin.qq.com/s?__biz=MzI4ODg2ODY3NQ==&mid=2247986796&idx=4&sn=8bd5bc85bfbcab032b814d4310b1e0db&scene=21#wechat_redirect
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