Tencent lost $140 billion in market-cap over delay in approval for ‘Fortnite’ game: Report

China’s Tencent Holdings saw its market valuation fall by close to USD 140 billion as it did not get approval for floating a game called ‘Fortnite’ in the country.

Fortnite, the most popular game in the world, is expected to rake in USD 2 billion this 2018 raising the market value of its developer Epic Games, from USD 5 billion to USD 8 billion, as per a Bloomberg report.

The report also noted that China has become the largest market for games as its revenues are projected to hit USD 38 billion this year.

Before a game is expected to hit the shelves in China, it has to go through a two-step screening process. The game first needs to be registered with Ministry of Culture and Tourism where it is combed through for any sensitive bits.

This is followed by a scan from a second agency that decides to grant a licence and allow commercialisation. Games with a lot of graphic violence and sexual content are put on hold.

Bloomberg stated that PlayerUnknown’s Battlegrounds (PUBG), did not get the second phase of approval, forcing Tencent to distribute the game without monetising it. Tencent looks to avoid the same fate with Fortnite.

The report also quotes analysts saying that the approval may be left in the lurch due to a rejig by the Communist Party of the State Administration of Press, Publication, Radio, Films and Television — the organisation earlier in charge of oversight of the press, publications and films.

As video games do not properly fit into any of these categories, approvals have been stalled for months. In the case of Fortnite, the Chinese authorities are yet provide a reason for not giving approval.

The report also noted that securing these approvals as quickly as possible is important given the cyclical nature of games where they might fall out of fashion soon.