In what is being viewed as a big blow to the future plans of gaming giants like Tencent, Weipai and NetEase, China will only allow children and teens under 18 years up to three hours per week to play online video games.
Previously under-18 gamers were allowed to play 90 minutes a day. However, the new notice said that children could play games only between 8pm and 9pm on Fridays and weekends. They can also play, for an hour, at the same times, on public holidays.
Chinese tech companies, including the gaming industry, have had to deal with an onslaught of regulation this year in areas from anti-monopoly to data protection. The new rules were published by China’s National Press and Publication Administration. Authorities have expressed concern over gaming’s impact on society.
According to the China Audio-Video and Digital Publishing Association, the industry brought in revenue of 130 billion yuan ($20 billion) in the first half of this year, but the government has been worried about the impact of gaming on its youth, from worsening eyesight to online addiction.
The rules will apply to companies providing online game services to minors, limiting their ability to serve those users outside of designated hours. The companies also will not be allowed to provide services to users who haven’t logged in with real-name registration, preventing them from simply remaining ignorant to their users’ backgrounds.
However, speaking to CNBC, Daniel Ahmad, a senior analyst at Niko Partners, said he did not expect a major change in the gaming companies’ bottomline.
“There are over 110 million minors that play video games in China today, and we expect the new limits to lead to a decline in the number of players and a reduction in the amount of time and money spent in game by those under 18,” Ahmad explained.
“However, we do not expect the decline in spend to have a significant material impact on the bottom line of game companies given limits on time and spending have already been in place for minors for the past two years. Therefore, we expect a softer impact on overall growth rates as spending among minors was already low.”
In a statement, Tencent said it will implement the new requirements and that it supports the new rules. In July, the gaming giant introduced a requirement for gamers to do a facial recognition scan on their phone to verify if they are an adult.
