Jump to content

Tencent and NetEase lose $80 billion in market value as Beijing seeks to impose new spending rules on online gaming

Commissar SFLUFAN

Recommended Posts

China announces rules to reduce spending on video games (Reuters)




Chinese regulators announced on Friday a wide range of rules aimed at curbing spending and rewards that encourage video games, dealing a blow to the world's biggest games market, which returned to growth this year.


The new rules, which will effectively set spending limits for online games, sparked panic among investors, wiping off nearly $80 billion in market value from China's two biggest gaming companies, as investors sought to gauge the potential impact on earnings and more restrictions in the offing.


Online games will now be banned from giving players rewards if they log in every day, if they 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.







The new rules revealed on Friday are the most explicit yet aimed at curbing in-game spending. Besides banning reward features, games are also required to set limits on how much players can top up their digital wallets for in-game spending.


"The removal of these incentives is likely to reduce daily active users and in-app revenue, and could eventually force publishers to fundamentally overhaul their game design and monetisation strategies," said Ivan Su, an analyst at Morningstar.


Games are also banned from offering probability-based lucky draw features to minors, and from enabling the speculation and auction of virtual gaming items.


But the new rules included a proposal that is widely expected to be welcomed by the industry, requiring regulators to process game approvals within 60 days.


Meanwhile, Chinese regulators announced on the same day licences for 40 new imported games for domestic releases, seen as a signal of Beijing's willingness to allow more games in the country, despite the draft rules on game spending.



Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    • No registered users viewing this page.
  • Create New...