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Banned apps' India dream may turn sour

By Sai Ishwar
September 18, 2020 11:41 IST
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Bringing a local or non-Chinese partner onboard opens up the possibility of legal recourse to have the ban diluted or revoked. However, the process of going through a review committee and setting up local servers might take at least 3-6 months.

Even as various games and applications scout for an Indian partner and sever ties with Chinese companies to circumvent the ban, the comeback might not be easy.

The clock, for instance, is ticking for the South Korea-based Bluehole Studio, which owns the PlayerUnknown's Battlegrounds (PUBG) and other smaller games like Carrom Friends and Ludo All Star, as it looks to stem the outflow of users, post-ban.

 

Bringing a local or non-Chinese partner onboard opens up the possibility of legal recourse to have the ban diluted or revoked.

However, the process of going through a review committee and setting up local servers might take at least 3-6 months, say legal and industry experts.

They also say the recovery may be delayed as the ban has been imposed for political reasons and not because of regulatory non-compliance.

“In the case of PUBG, the company made a statement in July that the Indian user data was stored locally.

"Despite that, it was banned two months later,” says Rishi Alwani, co-founder and editor, The Mako Reactor, a site that focuses on Indian and Japanese games’ market.

“The main objective (behind the ban) seems to be taming China and hurting the bottomline and valuations of its companies.

"The government may still have problems if Chinese companies have stakes in the original app developer.”

Last week, when the Indian government banned 118 mobile apps of Chinese origin or with China links, citing national security, PUBG, the most popular app on the list, decided to snap ties with Chinese firm Tencent Games for the mobile version of the game in India.

PUBG Corporation said it respected the measures taken by the (Indian) government as the privacy and security of player data was a top priority for the company.

Tencent, however, continues to have a stake in PUBG developer, Bluehole Studio. Tencent maintains the stake stands at 1.5 per cent, but there are reports that it could be as high as 10 per cent.

The battle royale genre of games, which PUBG falls into, meanwhile remains extremely popular with 600 million installs globally and 33 million active users in India alone.

Now if the apps don’t make a comeback within three months, the whole exercise will be “pointless” as a majority of the streaming and professional gaming community has already moved on to alternatives such as Call of Duty and Free Fire, as in the case of PUBG, says Alwani.

Pokémon Go is a case in point.

By the time it made a comeback after a few months in 2016, in partnership with Jio, the craze for the game was gone.

Sumit Kochar, corporate commercial lawyer and transaction advisory partner at Dolce Vita Trustees, offers another solution: that companies sell the apps to Indian partners.

This, he says, will address issues pertaining to data privacy and security, and of data storage servers rather than seek different franchisees and retain publishing rights themselves.

“A creative structure can be devised in compliance with data privacy concerns to sell the banned app to an Indian partner and seek royalties,” he says.

“PUBG retaining publishing rights will not address the concerns of the Indian government.”

Photograph: PTI Photo

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Sai Ishwar in Mumbai
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