Patcay.com – China is gearing up to hit the brakes on the roller coaster ride of the video game industry by introducing new regulations that aim to deflate the market and momentarily pull players away from their addictive virtual worlds.
In a decisive move to address gaming addiction, the Chinese government is drafting regulations to put the brakes on in-game purchases, steering players away from the abyss of deep-seated addiction.
This legislation is no joke; it’s like a lightning bolt poised to strike the world’s largest online gaming industry. Industry players are currently trying to recover from previous harsh blows.
This announcement immediately sent shockwaves through China’s technology stock market, shredding the value of companies by tens of billions of dollars. The plan for restrictions also reaffirms China’s ban on forbidden online game content, considered detrimental to national unity, security, and reputation.
Previously, Beijing had set “playtime estimates” for players under 18 in 2021, limiting them to just one hour on Fridays, weekends, and holidays. However, the latest restrictions are much more stringent.
The National Press and Publication Administration (NPPA), the industry regulator, now states that online games should not offer enticing rewards that lure players into continuous play and excessive spending. This includes daily login rewards and topping up accounts with additional funds.
Analyst Ivan Su warns that this move is likely to significantly reduce daily active players and app game revenue. “This could force game developers to fundamentally change their game designs and monetization strategies,” he says.
These new regulations also impact Tencent, a global gaming giant dominating the Asian market and investing in game studios worldwide. The NPPA’s announcement caused Tencent’s stocks to plummet sharply by 12.4 percent.
Tencent’s Vice President, Vigo Zhang, stated that the company will strictly adhere to any new regulations imposed by regulators. He emphasized that these new regulations align with the regulator’s focus on ensuring companies have reasonable business models and operational practices. Zhang also added that since 2021, protecting young players has been a priority at Tencent, with their spending and time on Tencent games dropping significantly.