Chinese regulators announced on Friday a wide range of rules aimed to curb spending and rewards in video games, dealing a blow to the world’s biggest games market, which returned to growth this year.
The new rules are the most explicit regulations yet aimed at curbing in-game spending. Online games will now be banned from giving players rewards if they log in every day, spend on the game for the first time, or if they spend several times on the game consecutively. All are common incentive mechanisms in online games.
Besides banning reward features, games are now required to set limits on how much players can top up their digital wallets for in-game spending.
Games are also banned from offering probability-based lucky draw features to minors, and from enabling the speculation and auction of virtual gaming items.
However, the new rules included a proposal that was welcomed by the industry, requiring regulators to process game approvals within 60 days.
Crackdown on video games
Beijing has become increasingly tough on video games over the years. In 2021, China set strict playtime limits for players younger than 18 and suspended the approvals of new video games for about 8 months, citing gaming addiction concerns.
Although the crackdown formally ended last year with the resumption of new game approvals, regulators have continued to dish out restrictions to curb “in-game” spending.
As a result of Beijing’s crackdown on gaming, 2022 was China’s gaming industry’s most difficult year on record as total revenue shrank for the first time.
China’s video game market returned to growth this year as domestic revenue rose 13% to USD 42.6 billion, according to industry association CGIGC.
The new rules reflect Beijing’s concerns over user data, requiring game publishers to store their servers within China.
New rules aftermath
Shares in Tencent Holdings, the world’s biggest gaming company, tumbled as much as 16%, while those of its closest rival, NetEase, plunged as much as 25% after the National Press and Publication Administrations published the new draft rules.
“It’s not necessarily the regulation itself, it’s the policy risk that’s too high,” Steven Leung, executive director of institutional sales at broker UOB Kay Hian in Hong Kong said.
Besides banning reward features, games are now required to set limits on how much players can top up their digital wallets for in-game spending.
Games are also banned from offering probability-based lucky draw features to minors, and from enabling the speculation and auction of virtual gaming items.
However, the new rules included a proposal that was welcomed by the industry, requiring regulators to process game approvals within 60 days.
Crackdown on video games
Beijing has become increasingly tough on video games over the years. In 2021, China set strict playtime limits for players younger than 18 and suspended the approvals of new video games for about 8 months, citing gaming addiction concerns.
Although the crackdown formally ended last year with the resumption of new game approvals, regulators have continued to dish out restrictions to curb “in-game” spending.
As a result of Beijing’s crackdown on gaming, 2022 was China’s gaming industry’s most difficult year on record as total revenue shrank for the first time.
China’s video game market returned to growth this year as domestic revenue rose 13% to USD 42.6 billion, according to industry association CGIGC.
The new rules reflect Beijing’s concerns over user data, requiring game publishers to store their servers within China.
New rules aftermath
Shares in Tencent Holdings, the world’s biggest gaming company, tumbled as much as 16%, while those of its closest rival, NetEase, plunged as much as 25% after the National Press and Publication Administrations published the new draft rules.
“It’s not necessarily the regulation itself, it’s the policy risk that’s too high,” Steven Leung, executive director of institutional sales at broker UOB Kay Hian in Hong Kong said.
