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China bans foreign investment in online video games

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China has banned foreigners from investing in the country's online games industry "in any form," as a way to restrict content that censors have deemed unhealthy to the public.

A mandate released over the weekend by the General Administration of Press and Publication and the National Copyright Administration said oversees businesses are now barred from investing in China's online game market though joint ventures, wholly owned enterprises, and cooperatives.

The rule also prohibits foreign investors from indirectly influencing domestic online game businesses by agreements or even offering tech support.

"The new rule is a good beginning in approving the online games in accordance with laws and will be conducive to the regulation of online gaming businesses," said Kou Xiaowei, veep of GAPP's technological and digital development to the state-run Xinhua news service.

The restrictions come on the heels of a wider campaign to shut down online games operating in China without approval and, as it were, containing "unhealthy" content. GAPP said it has shut down 45 overseas online games being run without authorization as of last Thursday.

Earlier this year, Chinese online game host and developer NetEase won the right to operate Activision Blizzard's popular MMO, World of Warcraft in the country after an extremely long regulation approval process and generous modifications to game content. It's unclear at this point how the new rule will affect foreign online games currently running within China. ®

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