In China, gaming is a national obsession. In July, it was revealed that 668 million individuals, or about half of the country’s population, regularly play video games.
However, the Chinese government is concerned about the impact of excessive gaming on children and adults and has enacted new legislation to limit the amount of time and money spent on games.
The laws are a setback for the world’s largest gaming market, with Tencent Holdings, Netease, and other gaming equities suffering as a result.
So, why has China attempted to rein in the country’s video game addiction? What does the legislation mean for gamers? And what about the country’s gaming business in the future?
What are the new video game rules?
Video games frequently allow players to spend money while playing, such as purchasing ammunition in shooting games. They also reward players who play the game for numerous days in a row with credits that can be spent on in-game purchases.
However, the new legislation will change everything. According to the proposed guidelines, online games will be prohibited from rewarding players if they log in every day, spend money on the game for the first time, or play the game numerous times in a row.
A third regulation will also prohibit chance-based fortunate draws within games, popularly known as loot boxes, which incentivize players to return to the game at regular intervals and stay online in the hope of winning.
Why has the government introduced these rules?
The Chinese government is concerned about the social impact of excessive video gaming, which is typically defined as playing for more than four hours per day, six days per week.
Dr Serkan Toto, CEO and founder of Tokyo-based Kantan Games Inc., a Japanese-focused independent gaming industry consultancy, explained the attitude to CGTN Europe.
He said: “I think that the Chinese government believes that playing games, especially for minors, but also adults, are not in the interest of the country.
“You can clearly see that the government wants to combat game addiction or spending too much money and too much time on games. They see that as a societal problem, which is very, very different from Western societies at the moment.”
China’s other initiatives to curb gaming
Players under the age of 18 were prohibited from playing games for more than 90 minutes each day, or three hours on public holidays, beginning in November 2019.
In August 2021, the rules were tightened even further, allowing under-18s to play for only one hour on Fridays, weekends, and public holidays. However, according to a study conducted this year by experts at the University of York, those limits had no effect on excessive gaming.
Additional measures, aimed at video game businesses, were later implemented, including a freeze on the clearance of new titles for eight months between 2021 and 2022.
The China Game Industry Group Committee issued a study in November 2022 indicating that the laws have successfully reduced video gaming among young people, revealing that 75% of young gamers now play for fewer than three hours per week.
How will these rules affect the gaming industry?
The new rules are a setback for the gambling business, which had previously reported steady growth. The Chinese gaming market’s sales income hit 144.263 billion yuan ($20.23 billion) in the first half of 2023, according to industry group CGIGC in July.
Toto, on the other hand, expects that the new regulations will make it impossible for foreign game creators to sell new games to Chinese consumers, and that they will instead focus on other markets.
He said: “The Chinese game developers are very good at adapting to new rules, and they’ve been very successful in terms of a global context.
“I think this set of regulations makes it even harder for foreign game developers to become successful in the Chinese market, because they have to sell through their Chinese partners and adhere to all of these new regulations.
“I believe that the Tencents and the NetEase of the world will most probably focus more on non-Chinese markets going forward.”
