Tencent and NetEase’s stocks are dropping at a massive rate due to China introducing new gaming regulations. Tencent’s stocks dropped around 16%, while NetEase’s fell 25%. [Thanks, Josh Ye!]
The new policies in question focus on online game management. These regulations mainly center on curbing spending in video games, specifically ones with a gacha element or a daily login. Here are some of the new policies that China is setting for its video game companies:
- Online games will no longer be able to offer rewards for daily logins. They can no longer give rewards for when players first spend money or when they spend money several times in a row.
- Games need to have a limit on how much players can spend to top up their digital wallets.
- Developers cannot offer “probability-based lucky draw features” to minors.
Aside from these limitations, game publishers will need to store their servers within China. This likely has more to do with concerns over cybersecurity. A final new regulation will require online game approvals “to be processed by regulators within 60 days.”
This is not the first time that China has drafted up regulations in order to curb gaming addiction among younger players. In August 2021, it announced that minors in China will only be allowed to play online games for an hour on weekends and holidays.
In 2020, China also implemented a policy that required real name verification when registering for games. At the time, NetEase and Tencent had their own verification systems, and some games even needed players to undergo facial recognition.
People will have until January 22, 2024, to comment on these rules to the government.
