He'd Been in Game Publishing Less Than Two Months When License Approvals Froze | 2018 Stories ⑥

A man who keeps calling himself “naive” and “blind” left himself a fallback in 2018. Was that … “luck”?

“Recording the actions and everyday life of ordinary people,” said Walt Harrington, “there is too little of that kind of record in our trade. These are stories that record the behavior, motives, emotions, beliefs, attitudes, discontents, hopes, fears, achievements, and longings of people as they search for meaning and purpose in their lives. They help people understand their place in the world.”

He once wrote a story: “The family’s teenage son had killed himself two years earlier. I tried hard to explain to them the kind of story I wanted to write, the depth I wanted to reach. The father listened for a long time, and finally said, ‘So you want to know what’s in my mind when I pray in a quiet room.’”

Harrington said the simplest form of it is this: how do people live, and what do they value?

Each of our lives makes up this world.

“2018 Stories” is a new column from QDaily.

In August 2018, Ren Tao’s anxiety looked entirely genuine. He turned up at the indie game party TapTap threw at ChinaJoy, and though he still picked up a few games on the floor that caught his eye, he was keener to talk about the trouble he’d walked into. He had entered the business only that February. He had filed the license applications for his first batch of mobile games — every game needs one of those publication licenses before it can legally launch in China — and run straight into an approval freeze that was still going on.

“Look at this, such a dumb little casual game, and they still can’t approve it!” he said, handing over the mobile game he wanted to bring into China — an all-ages platformer with animal characters — for people to try, complaining all the while about six months of waiting.

The words “approval freeze” were enough on their own to strike a chord with anyone who knew even a little about the state of the games industry that year.

The anxiety ran across the whole industry. On March 29, the former State Administration of Press, Publication, Radio, Film and Television issued a “Notice on Important Matters in Game Application and Approval,” saying that institutional reform would affect the pace of game approvals. As summer came on, more and more publishers voiced worry online about the halt in licenses; in mid-August the story gained momentum after Tencent had its operating qualification for Monster Hunter revoked, and foreign media began paying attention to how the reform was slowing game review. Observers noted that the Ministry of Culture was still registering games as usual, but the agency due to take over game approvals from the abolished administration — the National Radio and Television Administration — had been slow to start work. Then on August 30, the Ministry of Education and seven other departments issued a notice on the “Implementation Plan for Comprehensive Prevention and Control of Myopia in Children and Adolescents”, and the National Press and Publication Administration said it would control the total volume of online games, capping the number of new titles allowed to launch.

In share prices, that anxiety showed up as a disaster. Since the start of the year, 45 of China’s 52 listed gaming companies had seen their stock fall, 38 of them by more than 20%; netting gains against losses, the 52 companies had lost more than 856.6 billion yuan in combined market value. Tencent and NetEase were not spared, their shares plunging 5.1% and 7.1% respectively on August 31 alone. Overseas companies including Nintendo and Capcom were caught up in the turmoil too.

Ren Tao was a newcomer, and too optimistic. He had planned to bring in 20 games in his first year — apply in February, have the approvals by June.

It was “bringing in games” because Ren Tao was on good personal terms with a North American games man who was bullish on the Chinese market, and Ren’s job was to build that man’s publishing channel in China from nothing. Planning started in October 2017; the company was registered and began operating in February 2018. It was a cross-border team: four or five people in China handling localization and publishing, and roughly as many developers overseas providing technical support such as programming and modifying the games. His North American boss covered the salaries. He wouldn’t say how much, only that “that money isn’t much of a burden for the boss.”

Ren Tao submitted materials for five games in the first batch. One got its license in April; the rest all stalled. That effectively spelled the failure of his publishing business. He seemed to have picked the wrong business at the wrong moment.

If anything offset the anxiety — and he agreed to mention it only in passing, only near the end of our conversation — it was that game publishing wasn’t his only way of making a living. Under the same company name he ran another team of nearly 15 people doing game art outsourcing, and that business was going well, entirely able to support itself. His American boss knew all about it, he claimed, and didn’t mind.

In hindsight, that fallback now looked almost like “luck.”

1

Ren Tao is 29 and majored in English at university. He’d worked in chemical import-export, and had done marketing at a mid-sized game outsourcing company in Nanjing. “Marketing” really meant sales. Ren’s team of three to five people often flew overseas to negotiate outsourcing deals with developers. He described the process this way: “Mainly you become friends first, then you talk price, schedule, budget, requirements.” He had once been deep into PC games, which let him pick up the terminology and the technical side faster.

Looking back, that job changed the direction of his career, but at the time Ren saw it as labor-intensive work “basically no different from a sweatshop.” He minded that his boss went through three secretaries in a short span, each one parachuted in as his direct superior; obvious outsiders got to tell him what to do. “That doesn’t make any sense.” So last October he quit with nothing lined up.

What happened next gets fuzzy. By Ren’s account, he met his current North American boss through the old outsourcing company. The boss knew nothing about game publishing in China, and the two of them had one thing in common: both wanted to make money from the fat business of game publishing.

In 2017, overseas games people couldn’t ignore China’s fast-growing game market, mobile games above all. That was the year China took the top spot outright. Actual domestic sales revenue reached US$30.9 billion, up 23% year on year, 57% of it from mobile. That was enough to keep China first on the global chart of game markets, US$500 million ahead of second-place United States. Worldwide, mobile game revenue hit US$50 billion (about a quarter of it from China), 43% of all game revenue — a lead console games had almost no chance of threatening.

In the eyes of overseas developers, that made China more and more tempting. In theory, if a mobile game made it into China, a quarter of its future revenue would come from Chinese players. As of early this year the outlook still looked entirely bright, and exporting a game to China seemed like the obviously right choice.

That may explain how fast Ren’s publishing company came together — even though all of it looked rushed.

Ren knew nothing about game publishing at the time, and barely knew any publishers. Everyone came through personal introductions; he never posted a job listing. The people who joined were friends of friends, most of them with some experience in localization or publishing, and one of those who pitched in was his cousin. Because the company was small, he says he never felt any risk in it. “A company this small going under isn’t risky. This industry is fine too — all my employees could easily find another job. Even if the company folded tomorrow, nobody would really be affected.”

The staff had no office; they didn’t need one. Everyone worked from home, and when they had to meet they found a Costa or somewhere like it. Same for the overseas team, scattered across the United States, Belgium, Pakistan and Canada.

Game publishing, as Ren described it, really wasn’t so different from his old sales job. Publishing a game means modifying a developer’s finished product until it complies with Chinese regulations, then getting it onto the mobile app platforms. Once a game reached China, everything went to the domestic team: art, translation, promotional materials, the license application, and cultivating the platforms to secure good placement.

Ren liked two English phrases: “kiss ass” and “bullshit.” The first for flattering platforms into giving you placement; the second for every conversation that wasn’t about closing a deal.

2

Unless a game company holds an Internet Publishing Services License, both domestic and imported games must be published through a publishing house that has internet publishing qualifications. To save time and effort, most publishing staff go through an agency or a middleman, who hands all the materials to a publishing house, which submits them to the broadcasting administration for review.

The existence of these middlemen gave people a false confidence, as if paying money guaranteed getting things done.

The going rate for a middleman to handle one license was 14,000 to 30,000 yuan; those who promised speed charged more. “It sort of gives you the feeling they’ve got someone up top, but really they can’t guarantee anything — you have no way of knowing whether they have anyone up there at all.”

A friend introduced Ren to a middleman like this, at a price a few thousand yuan below market. He submitted materials for five games in the first batch and spent more than 40,000 yuan. The middleman thumped her chest and told him there’d be no problem.

He wasn’t clear on exactly how she worked, but figured it must be simple enough — mainly connecting the publisher to someone she knew at a publishing house. “Seriously, the middleman isn’t a games person at all. She might just be a stay-at-home mom who knows another mom at a publishing house, and the two of them put their heads together and started a business.”

By his reading, more and more middlemen were entering the trade because the number of independent developers had grown so fast in recent years, throwing license demand out of balance and raising demand for affiliating with publishing houses. Everyone wanted a license as soon as possible, and that produced a gray market for getting them processed.

Ren wasn’t much interested in the license process itself — all he needed at the end was a piece of paper. He didn’t even know whether the approval body had a website or had ever issued guidance. Like most people, he assumed that the experience of those who’d gone before and the middleman’s expertise would spare him a lot of trouble.

Preparing the materials was tedious anyway, even “painful.” Bringing it up, he laughed as he talked: you really can’t imagine it, tell a foreigner and they won’t believe you.

The publishing house sends over a checklist of about ten items, most of them disclaimers; there’s also a form of information about the game, and since the authorities set no strict standard, publishing staff generally fill it in from a template circulated online that is known to have a high pass rate. On top of that, the publisher has to print out 30 pages from the beginning of the game’s source code and 30 from the end and submit them on paper, to prove the product isn’t plagiarized.

That showed Ren how “old school” the business was — a replay of being pushed around by outsiders at his old company. “I asked the middleman, is this some high-tech thing? Do they scan it? Or is there someone amazing who can actually read code? She said she didn’t know either, but that’s what’s required. For some dumbass game of mine I had to courier over this thick stack of paper — printing it alone cost seventy or eighty yuan.”

The materials go first to the publishing house, which reviews them — no guarantee they pass — and then forwards them to the broadcasting administration. The administration may issue the license directly, or send back a list of required changes. Once the game is fixed you submit supplementary materials again. It’s a bit like applying for a visa, except there’s no way to look up what stage you’ve reached.

One of the five games got its license in April. All the localization was already done and only the license was missing, so Ren could submit the paperwork to the app store back ends right away, and an overseas mobile game formally entered the Chinese market. Two others came back with change notices: one was rejected because “the game materials don’t adequately describe the gameplay,” and the other ran into trouble over its name.

The middleman had warned him that a game’s Chinese name had to be simple, easy to understand and true to its content. Ren had given that casual game a name that hinted at the mechanics and sounded cute, built on an AABB pattern of repeated syllables. It turned out there was a Flash game with exactly the same name, which raised suspicion of plagiarism. So Ren had to file an extra document proving he hadn’t copied it. Since the two games had nothing comparable about them, from art to mechanics, there was no obvious place to start the argument, so in his words he simply had to “force it out.”

He suddenly felt real sympathy for Chinese filmmakers. “I used to curse domestic movies all the time. Not anymore. If a game as dumb as mine hits this kind of thing, films that are actually trying to express something must have it much harder. They probably have to revise a few hundred times.”

3

After the revised materials went in that April, four of the games went silent, and the company was forced into a wait. Bit by bit Ren picked up rumors from various quarters, none of them verifiable, all on the same theme: institutional reform, licenses had stopped, nobody knew when they would resume. He didn’t believe it at first, but after asking around among peers he found that everyone really was in the same boat. The publishers’ mutual-support group chats were all sighs and complaints, and people began greeting each other with “Has your license come through yet?”

Almost every month a rumor spread that approvals were “about to resume,” and just as quickly fell apart. In this open-ended wait, Ren tried to keep himself busy. His people went on localizing other games until August, when the domestic team had finished everything there was to do. “There’s work in my head, but there’s no actual work to go to.”

Aside from cat photos, his Moments feed mostly expressed his mood by recommending a song every few days. In mid-August he shared Green Day’s “Warning,” captioned: “One song sums up the situation back home.”

Besides watching for news about the license, Ren had one other task: explaining everything that was happening to the North American boss who was paying salaries for nothing. He dreaded it more and more, because there was truly nothing new to report. His boss asked often at first, then found it increasingly unbelievable, and his temper started to go. “He told me, WTF, go bribe someone. I said I’d like to, but I don’t even know the channel for it, and even if I did, I doubt my offer would be enough.”

After that their chat logs thinned out, and now it was a daily routine: “Any news?” “No.” He joked that the relationship had cooled over this, and that his boss seemed to have seen through it, no longer counting on that 25% from the Chinese market.

“In the end I actually felt calm about it. When everyone’s suffering, it stops feeling like suffering — it’s like smog. When I got the first one approved I got a little full of myself, thought, hey, this isn’t hard. But slowly it really turned into spiritual practice.”

At his worst, he even suspected the middleman had sold his license slot to someone else. Launching Game A inside Game B’s license shell is another gray-market trick — you just adjust the game’s content until it roughly matches the application — and licenses for popular categories often sold for over a hundred thousand yuan during the freeze. He suddenly realized that at bottom nobody else cared about the license: not the middleman, not the approval body; none of them cared whether publishers could keep their businesses running. And though he had paid, he had no way to seek redress, because redress would cost too much.

Turning it over, though, he decided the likeliest explanation was still that the licenses simply weren’t being issued, and the 40,000-plus yuan was wasted. He immediately added that the middleman was, in her way, half a victim too.

He tried to take the lighter view. “If everyone thinks we should fold, fine, let’s fold. It’s not so bad — one of my staff used to trade Bitcoin and is worth several million yuan, so he probably doesn’t care much about this job.”

4

The main reason he could take the lighter view was probably that his other business, outsourcing, was doing well. Having said his American boss didn’t mind, Ren then said he’d rather this didn’t become public, on the grounds that competition in outsourcing was fierce and he didn’t want too many people to know.

This was Ren’s own “gray area.” He genuinely wanted to make money on publishing alongside his North American boss, but as things turned out, all he could do was “count himself lucky” that he’d kept a fallback — though it’s hard to say whether quitting cold last October to go into publishing really was, as he puts it himself, “naive” and “blind.”

All his game-outsourcing clients came from overseas, longtime clients he had dealt with over the previous four years. During those four years he had in fact been paying close attention to how many corporate clients might be willing to follow him. He judged by each one’s needs, personality and company profile, and promised better terms to developers who wanted to save money, could gain something personally from the arrangement, and weren’t especially demanding. Going into publishing was a test of the water; taking outsourcing contracts was insurance. Nor did he rule out that some of these outsourcing clients might one day become publishing clients.

Dealing with overseas developers felt far easier. He now often sleeps by day and works at night, and all-nighters are routine, but what he deals with tends to be simpler, and that has left him more relaxed. He said he had once handled some domestic outsourcing projects for a friend, and had been disgusted by the other side’s unprofessionalism, late payments, and profiting from information asymmetry. “You just have to swallow it. Doing business here, you swallow it, swallow it, swallow it, swallow it, swallow it.”

There was no need, he said, to change his personality completely for profits that aren’t that big — and he was glad he hadn’t thrown himself into publishing in a fit of passion. He mocked himself as “incompetent,” while pointing out that “a lot of the time in China this trade is run by a bunch of people who don’t understand games and don’t care about them either.”

“Honestly, from day one I was thinking, what if it all falls apart… The best outcome is that even if it falls apart, nothing bad happens,” Ren said. He also often reflects that in some parallel world where nothing had gone wrong with license approvals, his company might have put out as many as 20 imported games in a year, and that going all in on publishing might have made him more money.

What he took from the wait is that the world is too complicated and the uncertainties too large, so predicting the future seems pointless; doing things in China with the assumption that it could all break up at any moment might be better. “Put out a feeler and test it; if it doesn’t work, pull it back. Set the floor low, and if it really doesn’t work out, let it collapse.”

If approvals resumed, he said, he’d probably think about the publishing business again, but he wouldn’t put much into it — maybe an hour a day on that side of things — and if it wore him out, he’d just stop.

“Most likely I won’t, honestly, because the tenor of this industry isn’t going to change — it’s still the same crowd on the Android platforms. Unless I absolutely have to, I don’t want anything to do with those people. I even deleted QQ. I’ve only got a few decades to live — why would I want to be tangled up with them?”

Still, told of a fresh rumor — supposedly things would reopen in November — he pressed for more: “Really? Who said that? No way.” He stressed again that he hears rumors like this every so often, and has learned not to pin much hope on them.

At the interview subject’s request, Ren Tao is a pseudonym.

Cover image from Unsplash @Euwen, Pexels