China aims to control excessive gaming spending with new regulations

Companies to face a hard time in China!

China has reportedly introduced draft regulations that establish new guidelines for the gaming industry to limit excessive spending on video games. The National Press and Publication Administration’s (NPPA) draft rules aim to address issues concerning in-game rewards and player spending.

China considers banning rewards in online games: No more daily rewards or bonuses for playing too much

The proposed regulations prohibit online games, including both mobile and PC games, from offering rewards that encourage players to play and spend excessively. This includes daily login bonuses, first-time top-up bonuses, and cumulative rewards for purchasing in-game content. Popular features like Welkin Moon and Battle Pass in games like Genshin Impact may be banned in China if these rules are implemented.

China new regulations
Image via GamingonPhone

Furthermore, the regulations require all video games to implement a limit on how much money players can top up their accounts. Pop-up warnings must also be used to warn users about irrational consumption behavior in games. These policies are part of a larger effort to promote responsible gaming and prevent overspending.

The NPPA, which is in charge of overseeing video gaming activities on the mainland, has also directed video game operators to follow through with various content moderation and user real-name verification requirements. The proposed rules are open for public comment until January 22.

China’s biggest company Tencent takes a $55 billion hit as stock plummets

The draft regulation’s announcement had an immediate impact on the stock market, particularly major Chinese video gaming stocks. Tencent, China’s largest public company, saw its stock fall 16%, resulting in a $55 billion loss in market capitalization. This is Tencent’s biggest one-day drop since 2008.

This move comes as part of a broader crackdown on the country’s Big Tech companies initiated by the Chinese government in late 2021. It is the first time since then that the government has specifically targeted the video gaming market, highlighting the industry’s increasing focus and regulation.

Following the proposed rules to limit video game spending in China, Feng Shixin, the head of the Communist Party’s Publicity Department‘s publishing unit, which oversees the National Press and Publication Administration (NPPA), has been removed from his position. This move comes just days after Chinese gaming stocks suffered a significant drop due to draft regulations aimed at limiting excessive video game spending.

The removal of Feng Shixin adds another layer to the country’s gaming industry’s evolving regulatory story. As the government continues to address concerns about in-game rewards, player spending, and responsible gaming, the reorganization of officials in charge of the regulatory body reflects ongoing changes in China’s regulatory landscape.

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