by
William D’Angelo
, posted 3 days ago / 4,723 Views
Chinese regulators has announced new rules that are designed to limit how much people in the country can spend on video games.
The new rules caused video game companies in China see their stock value plummet as Tencent and NetEase have lost a combined $80 billion in market value, according to Reuters.
Online games will now be banned from giving players rewards from logging in every day, if they spend money on the game for the first time, or if they spend several times on the game consecutively.
The new rules will also set limits on how much players can add to their digital wallets for in-game spending.
Tencent shares dropped by as much as 16 percent at one point, while NetEase saw share prices drop by as much as 25 percent following he National Press and Publication Administrations publishing the new draft rules.
Tencent Games’ vice president Vigo Zhang in a statement said the company will not need to change “its reasonable business model or operations” for games and it has been strictly implementing regulatory requirements.
Zhang added that minors have been spending very little money and time since China in 2021 implemented minor protection.
“The removal of these incentives is likely to reduce daily active users and in-app revenue, and could eventually force publishers to fundamentally overhaul their game design and monetisation strategies,” said Morningstar analyst Ivan Su.
The new rules do include requiring regulators to process game approvals within 60 days. The administration is looking for public comment on the rules through January 22, 2024.
A life-long and avid gamer, William D’Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
More Articles