On Christmas Day, Chinese gamers found that Steam—the world’s largest distribution channel for PC games—could not be accessed in the country.
Potential shoppers were limited to Steam’s Chinese version—a stripped-down version of the store with a much more limited selection of titles.
There were immediate concerns that Steam had finally fallen prey to Chinese censorship. But as Steam’s outage continued, more information emerged that complicated the story. Users reported being able to access Steam’s global storefront after persistent attempts, including via the desktop application used to launch Steam-purchased games. Steam’s community pages—such as user profiles and Steam’s marketplace for digital items—could also still be accessed.
Neither Chinese regulators nor Steam’s owner, Valve, released any comment on the outage, leading to rampant speculation on social media. Some claimed that Steam’s China outage was caused by a DNS attack, rather than any attempt at government censorship.
But Steam’s outage in China—whether caused by censorship or meddling by a third party—has revived fears among both consumers and developers that one of the easiest ways to access foreign video games in China may be subject to the country’s broader gaming crackdown.
Valve had not responded to Fortune’s request for comment by the time of publication.
Losing a big platform
Steam, managed by Washington-based Valve Corp., is one of the world’s largest platforms for purchasing digital copies of PC games. Steam accounted for 18% of all PC game sales in 2017.
Before launching its Chinese version in February 2021, Steam had no official presence in China. However, its global storefront could be easily accessed by Chinese users. Valve offered Chinese consumers the option of using Chinese payment processors like Alipay and WeChat Pay on its global storefront. Chinese users flocked to the platform—a 2018 estimate pegged Steam’s China player base at 30 million, one-third of its global total.
But earlier this year, Steam launched a local version of its storefront in China. The Chinese version of Steam only sells games formally approved by Beijing, leading to a vastly reduced lineup: Just 53 games were available at the platform’s launch, compared with over tens of thousands of items on the global storefront.
While Steam’s global storefront remained available despite the launch of the local Chinese version, users believed that it was only a matter of time until Beijing closed off access to the international storefront.
A wider gaming crackdown
Steam’s downtime corresponds with a wider crackdown on the gaming industry by Chinese regulators.
On Aug. 30, Chinese regulators ordered developers to place playtime controls on their games. Minors would only be allowed to play for a three-hour window each week, ostensibly to protect them from gaming addiction.
Regulators have criticized local video games for their content. Soon after announcing their playtime controls, regulators called major Chinese developers NetEase and Tencent to a meeting where they were told to remove “obscene and violent content” such as “money-worship and effeminacy.” Chinese developers later pledged to avoid listing their games on overseas platforms—including Steam and Apple’s App Store.
Chinese regulators have also not issued any new licenses for video games since July, leaving game developers in limbo. In November, Tencent announced that it would pull popular battle-royale game Fortnite from China after failing to get approval from Chinese authorities to monetize the free-to-play game.
Perhaps owing to China’s more constrained gaming market, Chinese publishers and developers are looking overseas. Bloomberg reported that NetEase was in the final stages of hiring Sega’s former chief creative officer and developer of the Super Monkey Ball and Yakuza series. On Dec. 20, Tencent acquired Turtle Rock Studios, developers of Left 4 Dead and Back 4 Blood, following significant investments, if not outright acquisitions, in foreign gaming studios across North America, Asia, and Europe.
And some Chinese-developed games have even been able to penetrate Western markets. Genshin Impact, from Shanghai-based miHoYo, since its launch on September 2020, has grown to an average monthly player base of 56 million, according to ActivePlayer.io.
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