China introduces new gaming regulations, to revise them following backlash

Recent announcements by Chinese authorities about new legislation aimed at lowering player incentives and expenditure in video games will have a significant impact on the gaming industry in that nation.

The market value of significant Chinese gaming companies fell precipitously as a result of the proposed rules, which imposed spending limitations for online games. Rival NetEase had a share price decline of up to 25%, while Tencent Holdings saw a share price decline of more than 12%.

The most recent recommended standards prohibit online games from giving players rewards for consecutive purchases, first-time game purchases, or daily logins. Investors were worried about the legislation’s potential impact on earnings and the possibility of future restrictions.

The Chinese government made an effort to reassure investors and tech leaders after realizing the market’s reaction. According to CCTV, the State Press and Publication Administration will closely examine complaints and remarks in an effort to improve and modernize the new legislation. Concerns have been raised about possible changes by the authorities to the suggested rules regarding daily login caps and wallet top-ups.

In 2021, China further up its regulation of the gaming sector, enforcing strict time limits on kids’ online gaming. The recent draft regulations show a renewed focus on restricting in-game purchases and addressing complaints about excessive gaming behavior, even if the crackdown seemed to be relaxing. The regulations further emphasize that “forbidden online game content” that jeopardizes national security or unity, or damages the nation’s interests or reputation, is prohibited. Proposed recommendations include pop-up notifications to warn gamers against engaging in “irrational” gaming behavior.

Original story by: Asia Gaming Brief