The Chinese government has introduced regulations to limit excessive online gaming among minors. Issued by the National Press and Publication Administration, these guidelines have received mixed reactions from the gaming industry and investors.

One proposal is to restrict gaming time for players under 18. During the school year, young gamers will only be allowed to play between 8 pm and 9 pm on Fridays, Saturdays, and Sundays. The aim is to balance education and leisure for young individuals.

Another important aspect of the new rules addresses excessive spending on in-game purchases. Regulators have taken action due to concerns about minors spending too much time and money on Tencent’s games. Going forward, companies will be prohibited from offering daily rewards for playing video games or making in-game purchases. Additionally, limits will be imposed on how often players can add money to their online accounts, aiming to prevent compulsive spending among minors.

The Chinese government’s concerns about the risks associated with “irrational” gaming behaviors have led to these new regulations. As part of efforts to protect young individuals, Chinese gamers will now need to provide identification when registering to play online. Furthermore, game publishers are required to store their servers within China to ensure user privacy.

The announcement of these proposals has had a significant impact on the gaming industry. Major Chinese gaming companies like Tencent Holdings and NetEase have seen substantial declines in their stock prices. Tencent, the world’s largest gaming company, saw its shares drop by up to 16%, while NetEase’s stock price fell by around 25%. This market reaction reflects concerns about the potential policy risks these new rules may pose for gaming businesses.

However, Tencent Games’ vice president has reassured stakeholders that the company won’t need to make significant changes to its business model or operations. While these regulations may affect revenue in the short term, the company remains confident in its ability to adapt and comply with the new requirements.

These proposed rules build on existing restrictions in China. In 2021, the government introduced regulations limiting online gaming for young people to a maximum of three hours per week. The suspension of game approvals in the same year further emphasized authorities’ determination to address the negative impacts of excessive gaming.

To ensure accountability and transparency, one of the new rules mandates that regulators process game approvals within 60 days. This will streamline the approval process and provide clarity to game developers seeking to launch their products in the Chinese market.

While the government’s intention to protect minors and promote healthier gaming habits is commendable, industry experts have expressed concerns about the potential impact on innovation and the overall gaming ecosystem. Critics argue that these regulations may stifle creativity and hinder the growth of the gaming industry in China. Balancing regulation and fostering a vibrant gaming culture will be crucial in navigating these challenges.

The public has until January 22 to provide feedback on the proposed rules, allowing stakeholders and the general public to contribute their perspectives and concerns. This collaborative approach reflects China’s commitment to ensuring that policies align with the needs and expectations of its citizens.

As the gaming industry continues to evolve, regulators must strike a delicate balance between protecting young individuals and fostering innovation and growth. These proposed rules represent a significant step towards achieving this balance, but ongoing dialogue and adaptability will be key to ensuring a vibrant and sustainable gaming landscape in China.