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China’s latest tightening of gaming rules is much ado about nothing. Except, of course, that nothing Beijing does is minor or inconsequential these days because everything the leadership says should be taken both literally and seriously.
Shares of the nation’s leading games providers including Tencent Holdings Ltd, NetEase Inc, Bilibili Inc. and Huya Inc tumbled after the National Press and Publications Administration decreed that minors would be restricted to playing games from 8 pm to 9 pm on Fridays, Saturdays, Sundays and public holidays.
That sounds pretty harsh, but needs to be put into context. Underage consumers are a small part of their business. Teenage gamers account for around 10% of revenue across the sector and approximately 15% of mobile gaming app users. For Tencent, the largest company in the industry, players under 16 contributed just 2.6% of games sales in the June quarter, or around $170 million.
This rule tightening will cut maximum game time by about 70%, but only for youths. And time-restricting kids’ gaming isn’t without precedent. Two years ago the government issued a daily cap of 1.5 hours, equivalent to 10.5 hours per week. China’s senior leadership felt that excessive games consumption was having a negative impact on kids’ study and lifestyle.
“Guiding online games companies to prioritise social benefits — effectively curbing minors’ gaming addiction, excessive consumption and other behavior — and protecting the physical and mental health of minors is in the spirit of the important instructions of General Secretary Xi Jinping,†the NPPA wrote in November 2019. In other words, this comes from the top. The latest move is merely an incremental, albeit large, step in a policy that was already in place.
Yet the increased control comes a month after a much harsher crackdown on China’s lucrative after-school education industry, when the government announced these services could no longer be offered for profit. Xi has shown direct interest in this sector, too. Back in March he noted that the industry had a tendency to exploit parental anxiety over ensuring their kids remained competitive.
—Bloomberg