China gaming rules – level 3

28-12-2023 07:00

New regulations in China aim to curb spending on video games, leading to a substantial market value decline for major gaming companies like Tencent and NetEase.

The rules, introduced by regulators, prevent online games from providing rewards for daily logins, initial spending, or consecutive spending sessions. This impacted common incentive mechanisms in the gaming industry. Investors reacted with concern, causing nearly 80 billion dollars in market value losses. Tencent Games’ vice president Vigo Zhang reassured that the company’s business model wouldn’t require fundamental changes, emphasizing adherence to regulatory requirements.

The regulations also include stipulations on setting spending limits and storage of user data within China. Despite investor concerns, the industry may find relief in the proposed faster game approval process.

Difficult words: incentive (a thing that motivates and encourages someone to do something), adherence (following a rule), stipulation (specific requirement).

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What specific measures are being implemented in China to regulate the gaming industry and how have investors reacted to these new regulations? What impact has this had on major gaming companies like Tencent and NetEase?


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