(Yicai Global) Nov. 21 -- Big Chinese game publishers, such as Tencent Holdings and NetEase, snatched up most of this month’s batch of new gaming licenses, giving rise to concerns by industry insiders that smaller developers might get squeezed out.

Most of the 73 game titles issued last week by the National Press and Publication Administration went to NetEase, Tencent and other big gaming firms, according to local media reports.

The government should provide a long-term funding scheme for small independent game publishers to avoid a monopoly, an industry insider told Yicai Global.

Many games are made by small teams, the person said. For example, the developers of Monument Valley were two people named ‘ustwo’. But when these geeky indie game production teams apply to the government for a license, some of them might not fit in and they will give up.

New licenses used to be issued every month however things changed last year when authorities began to tighten up regulation of the market. No permits were issued at all for eight months from August last year.

Part of the reason was to prevent profiteering and help improve game quality, a person who used to be in charge of gaming at a big game developer said. When restrictions were loose, game developers were like factories, churning out dozens of shoddy games every year.

Big budget boutique games require a lot of investment and are prone to losses, the person said. But so long as even one of these games arouses the passing interest of a few wealthy players, the company can rake in revenue of hundreds of millions of Chinese yuan, equivalent to tens of millions of US dollars.

Since April, the number of game permits has been on the rise, according to CITIC Securities. In the future, it is expected that game license restrictions and policy curbs will no longer be the main obstacles for publishers, but rather that they will compete on key points such as content quality and cultural elements, it said.

Editors: Shi Yi, Kim Taylor