Officially in China an online game must be granted a permit by GAPP before it gets launched. That permit may be requested of the GAPP directly by one of the 13 online game operators who hold a coveted GAPP Internet Publishing Permit. In the case of an operator who does not hold that permit the request must be made indirectly either through a state owned publishing house or through one of the 13 permit holders. That "service" costs the non-permitted online operator a fee, typically tens of thousands of dollars per game title. Many domestic online operators, particularly of casual games, have ignored the regulation and have simply launched their domestically developed online games without permit. The operation of those games was supposedly allowed if the operator holds a Ministry of Information and Industry (MII) Internet Content Provider (ICP) license. If the online game is imported, the ICP holder must also apply for and be granted a Ministry of Culture (MOC) Network Culture license prior to launching the game online.
 
This week we witnessed attempted power grabs by both the MOC and GAPP for their authority over online games. It seems that the GAPP is stating that any game that has not been approved will be taken offline, and any foreign games operated without permit will be banned and the operator will also be banned (Xinhua News Agency Oct 8, 2009). The GAPP may enforce rules that say a company must have an online game operation license in addition to an ICP license in order to publish and operate an online game.
 
The rules are complicated enough, especially since there are multiple ministries involved. The fact that they have not been uniformly enforced makes it difficult to know which rules will be emphasized. Should all rules be enforced, there may be a significant hiccup in online game operations in China. However, it is important to note that companies who have all the necessary permits for their own operation as well as for each game they operate generate at least 90% of online game revenue, and therefore the market revenue should not suffer much from the regulatory confusion.