Last week Chinese regulators published a new draft law that aims to curb in-game spending. The announcement published by the National Press and Publication Administration had a ripple effect that saw Tencent and NetEase lose around $80 billion in their market value as investors analyzed the long-term effect of the draft regulations.
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However, on Monday, December 25, the country’s gaming industry got an unlikely Christmas present. Chinese regulators approved 105 video games in one sweeping announcement. It was the highest single-day approval by the Chinese regulators since July 2022 (when 135 titles were approved).
The announcement was largely interpreted as an attempt by the Chinese regulators to restore confidence in the sector following the turmoil of the draft regulation. The new approvals add to the 98 imported games approved on December 22.
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“[The move] strongly demonstrates authorities’ clearly supportive stance on the development of online games,” said the semi-official trade body Game Publishing Committee of the China Audio-Video and Digital Publishing Association (CADPA).
NetEase’s Lost Light as well as Tencent’s Assault Fire: Future are among the games approved on Monday. Both games are online games which suggests the Chinese regulators are not totally against online multiplayer games.
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Instead, what the body language of the regulators suggests is that they want online game makers to rethink their monetization strategies. Chinese regulators have long expressed concern about the growing game addiction in the country.
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The fight to curb the menace led to an industry-wide crackdown that saw the regulators pause on new game approvals for eight months. The new draft regulation is coming at a time when the Chinese game industry has just started to recover from the effect of the crackdown.
Chinese regulators stress healthy growth in the gaming sector
The Press and Publication Administration announced that total game approval for this year has hit 1,075. Out of the total tally, 977 were games developed locally while 98 were games from foreign developers.
Chinese regulators froze new game approvals from August 2021 to March 2022. When new game approvals started, only 512 titles were approved in 2022. However, 748 titles had been approved in 2021 before the crackdown began.
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Since the draft regulation was made public on December 22, Chinese regulators have been scampering to mitigate its negative impact. A day after the publication of the draft regulation, Chinese regulators said it would “revise and improve the rules after “carefully studying and listening to the opinions of relevant departments, enterprises, users, and other parties”.
The draft regulation has now been subject to public opinion. Concerned members of the public can share their views until January 22, 2024. The regulation plans to put an end to the common incentives that game developers use to keep players online including offering daily rewards as well as setting a maximum spending limit for each account.
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The slump in the video game stocks continued through Monday in mainland China. Financial information shared by East Money shows that 26 gaming companies lost an average of 3.3% of their value.
Chinese regulators cited a “2023 China Game Industry report that revealed the online games market in the country surpassed 300 billion yuan ($42 billion). Also, the number of players hit 668 million.
“The Game Working Committee hopes that member units will take this opportunity to launch more high-quality products, promote high-quality development of the online game industry, and contribute to promoting cultural prosperity and development and building a culturally powerful country,” said the regulators.
