China has Imposed New Rules on the Online Video Game

On Friday, Chinese regulators unveiled a new plan aimed at reducing spending and rewards on video games. The announcement hurt the world’s biggest games market, which this year I was adding.

Under the new rules, spending on online games will now be limited, causing investors to panic. China’s two biggest gaming companies have been stripped of nearly $80 billion in market value. , while investors have tried to anticipate future earnings and expressions on further hurdles.

According to the new rules, players of online games will now not get rewards for logging in every day, if they spend for the first time or spend multiple times in a game. These are all common incentive options in online games.

Shares of Tencent Holdings, the world’s largest gaming company, fell 16% at one point, while shares of its closest competitor NetEase fell 25%, after the National Press and Publication Administration approved new draft rules. Published.

“It’s not just the regulation – it’s the policy risk that’s higher. People thought that kind of risk was gone, but now it’s back,” said Steven Leung, executive director of UBC’s Heian Broker. has come to light, which undermines confidence.

When asked about the impact of the draft rules, Vice President of Tencent Games Viggo Zhang said that Tencent has always strictly implemented the regulations. They say the new draft rules follow the regulators’ ongoing focus on giving companies “reasonable business models and operating cadence”.

In addition, Zhang also said that young people have spent less money on Tencent’s games, and are at historically low levels since 2021, after Beijing came into focus.

NetEase has not commented on this article.

Beijing has managed to crack down on video games over the past years in response to growing problems. In 2021, China imposed strong playtime limits for children under the age of 18 and suspended approval of new video games for approximately 8 months, due to the risk of gaming addiction.

Even after this crackdown, regulators have put in place more barriers to reduce “in-game” spending. The new rules announced on Friday are the clearest manifestation of this yet. Along with turning off reward features, games will also have to allow players to top-up how much for in-game spending in digital wallets.

“Removing incentives is likely to reduce daily active users and in-app revenue, and ultimately force publishers to fundamentally change their game design and monetization strategies,” said analyst Ivan Su.

Naye rules ke mutabiq, games nojawanon ko probability-based lucky draw features dene se bhi roke gaye hain, aur virtual gaming items ki speculation aur auction ko bhi nahi karne diya gaya hai.

But, the rules include a proposal that could be welcomed by the industry, suggesting regulators process game approvals within 60 days.

Meanwhile, Chinese regulators announced licenses for 40 new imported games on the same day, which could be a sign that Beijing is preparing to bring more games into the country, despite draft rules. .

The new rules also raise concerns over Beijing’s user data, requiring game publishers to store their servers in China.

The administration has announced it will accept public comments on the rules until Jan.

As a result of Beijing’s gaming crackdown, 2022 proved to be the most difficult year for the Chinese gaming industry, with total revenue declining for the first time.

China’s video game market rebounded this year, with domestic revenue up 13%, reaching 303 billion yuan ($42.6 billion), according to industry association CGIGC.

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