China is the world's biggest video games market. A recent report by the South China Morning Post indicates that Chinese regulators are slowing down the approval of new online games as a means to tackle online gaming addiction plaguing minors in the country.
This decision was followed by a meeting led by the publicity department of the Chinese Communist Party and the National Press and Publication Administration (NPPA), held on Wednesday. The announcement dealt a significant blow to video games industry behemoths, Tencent Holdings and NetEase after their stock prices fell steeply following the announcement.
Tencent and NetEase to "strictly enforce" game playing time for minors
Sources present at the meeting disclosed that regulators were appropriating an "aggressive" response against online gaming addiction. One source claimed that new approvals would be placed on hold in an attempt to "cut the number of new games" and thus to "reduce gaming addiction" in China. Another source claimed the licensing process for new games had already started to slow down more than a month ago.
Typically, the NPPA license between 80 to 100 games every month but have yet to release an approved list of titles for August. According to a source, the delay is necessary to "ensure a smooth and successful deployment" of strategies to curb online gaming addiction.
In addition to this, the South China Morning Post reports that Tencent and NetEase were instructed to "strictly" enforce NPPA restrictions, which included limiting gameplay time for minors to between 8 pm and 9 pm only on Fridays, Saturdays, Sundays and statutory holidays; and to purge video games of elements baring symbols of "gay love" or "money worshipping."
The same report added that the companies "were also reminded not to maximise their profits from video gaming and ensure that young people do not get addicted to games."
There's no doubt that these new regulatory rulings have led to a significant blow to industry giants. Tencent and NetEase stock prices dropped by 7.6% and 10.9%, respectively between Wednesday and Thursday afternoon. This translated to losses of over $60 billion, according to Bloomberg reports.
Tencent and NetEase have stepped in line to follow the new Chinese legislation but it's not certain yet whether Chinese regulators are starting a hard clampdown on game publishers, or whether their attempts are to simply tone things down. There's also no telling when the delay in licensing will be cleared to allow new games to be populated on the Chinese market.
This is a developing story and we endeavour to update you as more information unfolds. Be sure to follow us on Twitter for more news, guides and leaks from the video games, esports and entertainment industry.
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