In a move aimed at enhancing industry management and safeguarding the well-being of minors, Chinese regulators have unveiled proposed restrictions on online video games. The draft rules, issued by the National Press and Publication Administration, are open for public commentary before becoming finalized. These measures mark the latest in a series of regulatory interventions in the gaming sector over the past few years.
Key Regulations:
- Spending Limits: The proposed rules advocate for spending limits on game platforms to curb excessive expenditures by users.
- Minors and Live Streaming: The regulations seek to protect minors by prohibiting them from tipping videogame live streamers.
- Incentive Reduction: Game companies would be barred from offering rewards for daily logins to diminish incentives for regular gameplay.
- Data Localization: To enhance oversight, the rules stipulate that computer servers and equipment used by game companies must be located within China.
- Content Restrictions: Games must not contain state secrets or pose a threat to national security, according to the proposed regulations.
Chinese authorities began addressing concerns related to online game addiction among minors as early as 2019, initially imposing daily time limits on gamers under 18. Subsequent measures tightened these restrictions. Just four months ago, regulators proposed rules for a “minor mode” on mobile devices, aiming to limit screen time and restrict content for schoolchildren.
These new rules are part of a broader regulatory effort by the Chinese government to exert control over the tech industry, including e-commerce, financial technology, and ride-hailing businesses. This wider regulatory approach has led to significant market value losses for once-prominent companies, mirroring regulatory actions against their U.S. counterparts.
The announcement of the proposed rules had a substantial impact on Chinese videogame companies’ stock prices. Tencent experienced a 12% decline, while Netease saw a sharp 25% drop. China’s online game industry, which leads globally in both users (650 million in 2022) and revenue ($45 billion), faces potential shifts in its operating landscape.
Public and industry stakeholders have until January 22 to provide feedback on the proposed regulations. The National Press and Publication Administration will consider the input received, and potential amendments could be made before the rules take effect.
As China continues to refine its regulatory framework for online video games, these proposed measures reflect an ongoing effort to balance industry growth with social considerations, particularly regarding the well-being of younger players. The impact on the gaming industry and subsequent revisions to the regulations will be closely monitored in the coming months.
