The last few weeks have not been good for the gaming community in China. As early as the beginning of August, an article in the state media Xinhua sharply attacked the entire industry and compared video games with the use of opium.
Just one such piece of material is enough to instantly bring down the shares of the gaming industry giant Tencent, and four weeks later the government struck another blow by imposing restrictions on all minors. Currently in China, people under the age of 18 can play video games for an hour on Fridays, Saturdays, Sundays and national holidays.
The rest of the time you will have to be content with watching videos.
This is of great importance given that the number of active gamers in the country is about 700 million, and only children are over 110 million – more than the population of almost all countries in the world.
The pressure continues this week, as after a meeting with representatives of major gaming companies in the country, state regulators imposed a temporary ban on the approval of new games. Developers and distributors also now have an obligation to rework their products so that they are not addictive, with severe penalties for those who do not adhere to the new restrictions.
All streaming platforms are also affected, which will have to monitor the activity of minors and eliminate any options for their promotion.
In reality, the restrictions affect absolutely every game that can be purchased or downloaded in China, and this is already being felt on the market. In just one day, the value of Tencent and NetEase shares fell by 8% and 11%, respectively.
For most people in the West, these are two completely unknown names, but in fact the companies are real giants.
Tencent is actually the largest gaming company in the world – a huge conglomerate whose portfolio includes investments in social networks, music, e-commerce, payment systems, production and distribution of video games. One of their most famous products is the mobile game Honor of Kings, which at the end of 2020 has about 100 million active users.
For its part, NetEase is considered the second largest company after Tencent and is a major partner of Blizzard Entertainment in the distribution and maintenance for the Chinese market of the super-hit titles World of Warcraft, Fortnite and Starcraft 2.
In reality, the short-term consequences for game distributors and producers may not be so severe.
After all, minors themselves are not the source of income that gaming companies aim for, and restrictions have been introduced so far – as early as 2019, regulators impose a three-hour daily limit for the days of the week, which was expanded with the latest changes. .
In the long run, however, the consequences can be much more serious and reduce the potential number of players in the future.
“Currently, many young players are limited, which means that when they get older, gaming may not play an important role as a means of entertainment for many of them,” explains Chen Yu Sui, a market analyst at consulting firm Omdia. “So in 15 years, we can see how the industry, especially the mobile industry, has shrunk significantly.”
The announced reasons for imposing such measures are the concerns about the health of children and their addiction to games. Although the government does not offer official data on how serious this problem really is, in this sense, large companies are urged to shift their “focus from looking only to profits and attracting new players.”
Apart from the sheer concern of the younger generation, however, there are very likely some other reasons for depriving children of one of the most popular means of entertainment in recent decades.
Games themselves have long been a kind of social platforms and places where all sorts of topics and ideas are freely discussed. Something that is generally not tolerated by totalitarian regimes like that of the Chinese Communist Party.
It is no coincidence that the government has practically established full control over social media and networks, and for years every activity there has been monitored, censored and sanctioned. It is logical that along this line the games should come under the full control of the party.
Especially when it comes to children, who need to spend less time on activities that provoke creative and free thought, and more time – at school.
Where the “Doctrine” of the first party and state leader Xi Jinping was recently introduced as a compulsory subject to study, and minors should be acquainted early with the details of “socialism with Chinese characteristics.”