October 27, 2021

The truth behind China’s online gaming crackdown

Zhu Jingtong was shocked. A manager at a games publisher in Shanghai, Zhu and her colleagues were blindsided. “We didn’t know anything beforehand,” she says. “We found out at the same time as everyone found out.” Xinhua, China’s national wire service, had just announced new limits on the time that Chinese children could spend playing online video games.

Those under the age of 18 can now only play for one hour, between 8pm and 9pm, on Fridays, weekends, and public holidays. These are by far the severest restrictions on game-playing of any country where internet access is widely available. Many online games in China require ID registration, and for minors signing in, the system logs the time spent playing. If a child exceeds the time limit, a window pops up, leaving little choice but to stop.

The rules impact every game published in China that can be downloaded or accessed online, affecting mobile games and PC games. (Console gaming remains a relatively tiny part of China’s enormous gaming scene.) Some 743.5 million people play games in China, according to market research firm Niko Partners, of which around 110 million are under 18.

“The restrictions were already strict,” says Zhu, referring to 2019 regulations that had already proscribed minors to playing 1.5 hours on any day, and three hours on holidays. “To push it even further, it’s really unexpected,” she says. “It’s going to hit the industry hard.” Zhu’s colleagues were scrambling to update their games’ backend, to ensure their titles complied with the new rules, which went into effect just a few days after the announcement.

The new measures are designed to prevent minors from becoming addicted to online games, which are a “widespread concern” that “the majority of parents agree with,” according to a document issued by Chinese authorities. The four-page announcement mentions “anti-addiction” or “addiction” nearly two dozen times in language that is targeted and repetitive, and says that “teenagers are the future of the motherland.”

The blow to gaming stocks was relatively mild after the announcement, as children are not a major source of revenue for gaming companies, and restrictions were already in place for minors. But analysts predict long-term consequences. “What we’ve learned from the historic console ban in China is that consoles remain a niche in the region, even now,” says Chenyu Cui, a senior games analyst for Omdia, a tech-focused market research firm.

“When these restricted younger players grow older it’s possible that games will not play as big a part in their consumption of entertainment media, meaning the industry – particularly mobile – could start shrinking after perhaps ten to 15 years.”

Daniel Ahmad, a senior analyst focused on China and Asia for Niko Partners, says these regulations are part of an ongoing trend to control the popularity of online games in China and is part of a wider push to more tightly regulate gaming for minors.

In recent years Beijing has sought to bring China’s sprawling online gaming ecosystem to heel with measures including formalising and strengthening ID systems, and boosting censorship controls. And the social impact of gaming, as it has grown, has come under increasing scrutiny.

These restrictions are also taking place amid a wider crackdown on China’s entertainment industry, which include punitive measures against online fan clubs and celebrity fan culture (such as the sale of merchandise and websites which rank celebrities), and on tech firms such as Tencent and DiDi. Analysts also predict that live-streaming and video apps will see greater government regulation to tackle “internet addiction,” in a national Marxist revival under Xi Jinping’s leadership.

In short, Beijing wants people to spend less time eyeing celebrities and content that could draw away their admiration. The revival included introducing “Xi Jinping Thought” into the national curriculum, from primary school up to university, so that “teenagers establish Marxist beliefs”, according to guidelines released by China’s Ministry of Education in 2018.

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