Research On The Impact Of The Tightening Of The ISBN Application On The Value Of Online Game Enterprises

With my country’s rapid economic growth and rapid technological innovation,people’s increasing demand for experience consumption and the continuous update and iteration of my country’s infrastructure have resulted in a leap-forward growth in the scale of the online game market.Although the revenue of the game industry has increased rapidly and people’s basic spiritual needs have been met,industry problems have gradually been exposed.A large amount of capital has entered the game industry,causing the market to be chaotic,the number of games is flooded but the quality is uneven,economic benefits are less social benefits and other issues,which do not meet the realistic requirements of my country’s 2017 to improve quality development.In this context,in 2018,relevant departments imposed restrictions on the new game application,and the tightening of the ISBN application came.In March 2018,National Press and Publication Administration issued the "Notice of Important Matters Concerning Game Application Approval",announcing the pause in the new game application.In August 2018,eight ministries including the Ministry of Education of the People’s Republic of China and National Press and Publication Administration issued the "Implementation Plan for Comprehensive Prevention and Control of Myopia in Children and Adolescents",which proposed to implement total control of online games and control the number of newly added online games.Since ISBN is a necessary condition for the commercial operation of the game,the tightening of ISBN application has caused a huge impact on the game industry.In 2018,more than 9,700 game companies closed down,and the market size growth rate dropped sharply to 5.30%.In 2019,more than 18,700 game companies closed down,and the market growth rate rebounded to 7.66%,but it was still far below the level before the ISBN application tightening.This article studies the impact of the tightening of the ISBN application on the value of online game companies and can improve theoretical research on government regulation in the game industry.Moreover,this article analyzes the operating methods of companies that are still gaining significant growth in the context of the tightening of the ISBN application,which can provide ideas for other game companies to adopt coping strategies.Based on the summary of domestic and foreign scholars’ relevant research literature on regulation of the online game industry,corporate value,macro policies and micro corporate behavior,government regulation and corporate behavior,policies and corporate value,this paper takes government regulation theory,intrinsic value theory,industrial organization theory,product life cycle theory,and overreaction theory as Theoretical basis,analysis of the impact of the tightening of ISBN application on the value of online game companies.First,this article starts with the status quo of the online game industry,sorting out the history of the ISBN policy,the reasons for the tightening of ISBN application,and the development status of the game industry before and after the tightening of ISBN application.Secondly,select 14 A-share listed game companies as sample companies and use the event research method,we can analyze the market response to the tightening of ISBN application by the AAR and CAAR before and after the announcement of the suspension of the ISBN application which means the starting point of the ISBN application tightening,so as to understand investors’ views on the tightening of ISBN application.The study finds that the tightening of ISBN application has brought about a negative market reaction,and investors have relatively pessimistic expectations for the tightening of ISBN application.Next,37 Interactive Entertainment is used to be the case study object.This article analyzed its corporate behavior under the tightening of the ISBN application.Under the pressure of policy control,37 Interactive Entertainment mainly adopts avoidance-style response behavior,which is manifested in the three aspects of R&D,operation,and investment.Then use financial index method,EVA,Tobin’s Q to multidimensionally evaluate the impact of the ISBN application tightening on corporate value.Through the analysis of the financial index method,it is understood that the impact of the ISBN application tightening on 37 Interactive Entertainment is mainly concentrated on profitability and development ability.In addition,through the EVA and Tobin’s Q to measure the corporate value of 37 Interactive Entertainment,the study found that the corporate value of 37 Interactive Entertainment increased significantly after the tightening of the ISBN application.Based on the above analysis,this article draws the following conclusions:(1)The tightening of the ISBN application has led to the industry’s accelerated elimination of tail companies,and the game market is further concentrated on the head.(2)The announcement of the ISBN application tightening brought a negative market reaction,and market investors hold more pessimistic attitude for the ISBN application tightening.(3)The tightening of the ISBN application has a positive impact on the corporate value of 37 Interactive Entertainment.Based on the analysis of the tightening of the ISBN application and specific cases,this article puts forward the following suggestions:(1)The government should perfect the judgment rules and support policies for boutique games to avoid one size fits all policies.(2)Enterprises should pay attention to improving their own R&D capabilities and actively integrate with new technologies.(3)Enterprises should pay attention to the long-term operation of games and the expansion of overseas markets.