Why has China introduced video gaming rules?

Gaming is a national obsession in China. In July, it was revealed that 668 million people - roughly half of the country's population - play video games on a regular basis.

But the Chinese government is concerned about the impact of heavy gaming on children and adults and has introduced new laws designed to limit time and money spent on games.

The regulations are a blow to the world's biggest gaming market - the news knocked the value of Tencent Holdings, Netease and other gaming stocks.

So, why has China sought to curb the country's video game obsession? What do the laws mean for gamers? And what does the future hold for the country's gaming industry?

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What are the new gaming laws?

Video games typically allow users to spend money while playing, for example on buying ammunition during shooting games. They also reward players for streaks - playing the game for multiple days in a row - by awarding them credits that can be spent on in-game purchases.

But the new laws will change all that. Under the draft rules, online games will be banned from giving players rewards if they log in every day, if they spend on the game for the first time, or if they play several times on the game consecutively.

A third law will also ban probability-based lucky draws inside games, often referred to as loot boxes, which encourage players to return to the game at frequent intervals and stay online in the hope of getting lucky.

Why are the laws being introduced?

The Chinese government is worried about the impact of heavy video gaming - commonly cited as playing for more than four hours per day, six days per week - on society.

Dr. Serkan Toto, CEO & Founder of Tokyo-based Kantan Games Inc., an independent game industry consultancy focused on the Japanese market, explained the stance to CGTN Europe.

He said: "I think that the Chinese government believes that playing games, especially for minors, but also adults, are not in the interest of the country.

"You can clearly see that the government wants to combat game addiction or spending too much money and too much time on games. They see that as a societal problem, which is very, very different from Western societies at the moment." 

What else has China done to curb gaming?

In November 2019, players under the age of 18 were banned from playing games for longer than 90 minutes per day or three hours on public holidays.

Those rules were tightened even further in August 2021, so under-18s could only play for one hour on Fridays, weekends and public holidays. But a study published this year by researchers at the University of York found that those restrictions had no impact on heavy gaming.

Additional measures were then applied, targeting the companies that make video games, including a freeze on the approval of new titles for eight months between 2021 and 2022. 

In November 2022, the China Game Industry Group Committee released a report stating that the regulations had successfully curbed video gaming among young people, revealing that 75 percent of young gamers now play for less than three hours per week.

How will the gaming industry be affected?

The new laws are a blow to the gaming industry, which had announced steady growth earlier this year. In July, Industry association CGIGC, said sales revenue of the domestic gaming market reached 144.263 billion yuan ($20.23 billion) in the first half of 2023.

However, Toto says the new restrictions are likely to make it difficult for foreign game developers to sell new games to consumers in China and predicts they will now target other markets.

He said: "The Chinese game developers are very good at adapting to new rules, and they've been very successful in terms of a global context.

"I think this set of regulations makes it even harder for foreign game developers to become successful in the Chinese market, because they have to sell through their Chinese partners and adhere to all of these new regulations. 

"I believe that the Tencents and the NetEase of the world will most probably focus more on non-Chinese markets going forward."

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