Apple says it lost revenue due to China’s temporary ban on approving new video games last year. The financial hurt from the censorship of iOS mobile games was one of the many reasons Apple cited for its $4.8 billion revenue decline in Greater China during the 2018 holiday quarter, with the company generally pointing to the country’s economic slowdown.
“The App Store in China is a large business for us,” Apple’s financial chief, Luca Maestri, said during an earnings call today. “We believe the issue around approval of new game titles is temporary in nature but clearly it’s affecting our business right now.”
The video game ban does appear to be lifting, although titles are still getting approved at a slow pace and the criteria for which ones are allowed isn’t publicly known. It’s been a costly ban on an industry that made over $30 billion last year.
The ban came seemingly out of nowhere and has been strictly enforced. Back in March, China swiftly stopped approving new video game releases, meaning titles in development could not make it to the public’s hands. Then in August, Beijing officially cemented the ban just days after President Xi Jinping gave a speech about myopia and authorities recommended curbing video games as one of the solutions. The ban was strictly enforced until the last days of December, when China approved 80 new video game titles, with more trickling in this month.
The ban has had an obvious and immediate impact on domestic companies in China, with some analysts estimating video game giant Tencent lost over $1.5 billion. The video game approval ban affecting Apple’s bottom line is an outcome that’s more surprising, though it speaks to how intertwined the company’s various businesses are with China.