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Posted in: Games, Mobile Games | Tagged: china, gaming
China Eases Up On New Regulations For Online Game Spending
China announced new plans to restrict spending for online gaming after the original announcements caused financial issues with publishers.
Article Summary
- China's NPPA unveils new regulations to curb online gaming addiction and limit spending.
- Initial regulations announcement caused a massive $80 billion loss for Tencent and NetEase.
- Regulators modified the rules to protect major firms after market backlash and financial impact.
- New guidelines target smaller game companies, easing restrictions on China's biggest publishers.
Chinese regulators are preparing to hit the marketplace with a new set of guidelines that are designed to cut the time and money people spend on online gaming. The National Press and Publication Administration (NPPA), one of the biggest regulators in Chine, posted a draft for a new set of rules back on December 22, letting gaming companies know about a new set of regulations on the way that were designed, in essence, to protect consumers from overspending financially on games, as well as spending excessive amounts of time on them. This included removing rewards that incentivize players to return, giving freebies as an encouragement to spend more, or offering daily rewards that would require people to continually log in to receive them or keep a streak going.
When the word of these new rules got out, it sent China's marketplace into a bit of a frenzy, as both Tencent Games and NetEase Games saw a combined loss of $80 billion in revenue selloff after the news hit, due primarily to investors not being thrilled with the news that the restrictions would, for the most part, curb the amount of daily revenue coming into the industry.
However, it looks like those regulators have changed their tune a bit, as a week later, they have issued a new set of "softer" rules. Due in part to the financial damage caused by the original draft. A new report from a Chinese outlet called TMTPost stated that these new regulations would now primarily affect the smaller and medium-sized game makers, while they would only moderately affect many of the country's bigger companies, such as Tencent and NetEase. You don't need a finance degree to see that the original ruleset had such a rapidly negative effect on their own marketplace that they chose to ease up on the companies that were the real moneymakers while still tightening up on ones that don't make as much. Regardless of whether you agree with China about what they're doing, the reality is you'll start seeing fewer promotions bombard you in their mobile games in the near future.
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