From Internet Business Law Services (via ConsoleJocks):

E-sports, or video game tournaments, have become increasingly popular in China. At the same time, Chinese regulations governing the e-sports market are extraordinarily restrictive and serve as a barrier to foreign investors; forcing them to adopt creative solutions in order to reap the benefits of access to Chinese e-sport consumers.

E-sports can be generally described as video game tournaments. This type of sport has been formally recognized by the Chinese government as the 99th Official Sport of China and was featured as the “Welcome Event” of the 2008 Summer Olympic Games in Beijing. Although this emerging industry is very attractive to foreign investors, the difficulty in entering the Chinese e-sports market arises from the Chinese government’s strict regulations on e-sports and on video games in general, and does not differentiate between e-sports and home video games. Due to the stringent nature of Chinese regulations in this area, investors are forced to seek creative solutions if they wish to enter the e-sports market.

The Chinese regulations governing video game websites came into effect on January 31, 2008. The relevant regulation, entitled the “Regulation on Managing Video Sites,” establishes rules for to the lawful operation of video game websites in China, including those devoted to the promotion of e-sports. Individuals and entities that wish to operate e-sports games in China must obtain three necessary permits, all of which have stringent requirements. One of the permit requirements even goes so far as to bar companies that are “foreign-invested operational entities” from receiving the permit and, thus, from legitimately operating e-sport services in China. One hallmark of this regulation is that it is highly protective of the internal industry and creates barriers for foreign companies that seek to access the Chinese video game market.

One can see the possibilities of what could be in South Korea, particular in regards to Starcraft competitions (one of the professional Korean Starcraft teams is sponsored by the Korean Air Force!). Perhaps the Chinese government is afraid that if they allow foreign companies to invest in these events, that more foreign video game players will compete, and more incidents like the Taiwanese Controversy at the World Cyber Games will occur.

Most surprising is that video game tournaments are the 99th Official Sport of China. What are the other 98?

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