Sunday, September 26, 2021

Playtime Is Over for China’s Online Gamers

The Chinese government is quite notorious for its imposition of censorship on Internet usage. Now, the state is targeting the children with its censorship model, but in a different way. A newly declared rule of the Chinese Communist Party (CCP), states that China’s online gamers under age 18 will be only able to play games in a limited manner.

China’s online gamers are allowed a maximum of 3 hours of online games per week. Online gaming in the country is now only available to people younger than 18 from 8 p.m. to 9 p.m. on Fridays, Saturdays, Sundays, and public holidays. The decree is supported by an “anti-addiction registry.

Shares of gaming companies slide on news of the new rules

The government has told online gaming companies to curtail services offered by them to young gamers. The government said the move will help thwart video game addiction. 

The gaming watchdog, the National Press and Publication Administration (NPPA) said all online gaming companies will have to adhere to the new timing rules. They will also have to deploy effective user verification systems.

Shares of the country’s biggest game companies slide on news of the new rules. The Chinese online gaming market is huge. While Tencent Holdings said it gets a small percentage of gaming revenue from underage players in China that may not be the case with all other gaming entities. NetEase is another gaming giant in China and its U.S. listed shares slid by 4 percent on news of the new rules.

The Chinese government has told online gaming companies to curtail services offered by them to China's online gamers.
The Chinese government has told online gaming companies to curtail services offered by them to young gamers. (Image: Julia Martyniuk via Dreamstime)

A new rule: Suspension of all new online games

In follow-up rules affecting China’s online gamers, Chinese regulators have also temporarily suspended approval for all new online games in the country, dealing a fresh blow to the video gaming businesses of industry giants Tencent Holdings and NetEase.

This development came out of a meeting on September 8 called by regulators, led by the publicity department of the CCP and NPPA, to discuss with representatives from Tencent Holdings and NetEase how they will implement Beijing’s new restrictions on video gaming for minors, according to a person briefed on the matter, but declined to be named.

It is unclear how long this suspension of new game approvals will last, according to the sources. There was a nine-month freeze on new video game approvals in 2018, which negatively affected many small developers, amid changes made in China’s regulatory framework.

NetEase U.S. listed shares slid by 4 percent on news of the new rules. (Image: NetEase)

Part of a broader campaign to clip the wings of ‘Big Tech’

Chinese regulators have been involved in near-continuous campaigns targeting the country’s tech giants since last winter when President Xi first tasked government bodies with curbing the “disorderly expansion of capital.” 

The policy directive issued during the CCP’s central leadership meeting involves better regulations and standards for identifying monopolistic companies, governing the collection and use of data, and protecting consumer rights.

A wide range of government bodies has since taken to drafting new regulations and initiating campaigns designed to clip the wings of ‘Big Tech’.

These include revoking approval for fintech giant Ant Group to go public, an antitrust fine against e-commerce giant Alibaba Group Holding, forcing Tencent Holdings’ music arm to relinquish exclusive licensing deals, a cybersecurity probe into ride-hailing giant Didi Chuxing, and effectively signing a death warrant for the entire private tutoring industry.

The barrage of bad news for tech companies this year has wiped more than US$1 trillion off Chinese tech stocks, leaving rattled investors trying to guess what regulators might do next.

Beijing has repeatedly attempted to soothe investors’ nerves with talk of commitment to healthy, long-term economic growth, but the crackdown still has no end in sight.

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Max Lu
Max Lu is an author who specializes in Asian geopolitics.
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