On Monday, August 30, the National Press and Publication Administration of China announced that officials had set new restrictions on video game usage within its country’s borders. China informed all online video game companies that they must restrict the amount of time minors play their games to three hours each week by no later than Wednesday, September 1, 2021.
China’s History of Game Restrictions
In 2018, China restricted children ages 12 and younger to a daily limit of one hour of mobile game play per day and children ages 13 to 18 to two hours per day. In 2019, China increased the restrictions so that minors could only play one and a half hours per day outside of 10 p.m. to 8 a.m. and limited their freemium and premium in-game microtransactions to $28 to $57 per month. Game companies created a registration system in 2018 based on player real names to manage play game time.Read More »
The Impact on Parents and Adults
Parents of minors can expect more face and family time with their children. They can also expect an increase in future interactions with regulators because of proposed youth anti-addiction projects coordinated by the government at school and community levels. The current restrictions don’t impact adult mobile game players at all unless they have frustrated children in their households.
Why Has China Imposed This Rule?
In 2018 and 2019, China claimed that minors suffer eye damage and increase their risk of nearsightedness with too much game play. China currently claims that online games have too much of a negative impact on children’s physical and mental wellbeing and cause early addiction problems.
China has a clear growing mobile game addiction crisis. In August, state-run media outlets referred to mobile game play as “spiritual opium,” which caused shares for Chinese gaming companies to drop rapidly. Yet, some financial and socio-political experts see this as another part of China’s larger plan to make its future work force always available and productive. Video game playing when it reaches addiction levels reduces productivity.
How Can China Guarantee Compliance?
Any child that wants to play any online game must sign up for a single real name account and their national identification number. Game companies also produce tools to guarantee compliance. In July, facial recognition software made it impossible for children to log onto their favorite games at night when their parents sleep.
Chinese regulators can access the real name system any time they want to verify that it works. They have stated through state-run media that they plan to increase their inspections and oversight of gaming companies, regularly evaluate how companies handle addictive elements like in-game purchase and increase game reviews and non-compliance penalties.
More Tech Restrictions Expected Soon
Although China’s mobile game market represents the largest percentage of mobile gamers in the world and a sizeable revenue stream for the Chinese economy, authorities in Beijing who previously expressed interest in restricting tech companies confirmed this week that they plan to pass further technology sector restrictions soon. Chinese media revealed that President Xi Jinping plans to place limits on the expansion and power held by game and platform companies.
China Leaves Questions Unanswered
Chinese officials failed to clarify whether these new regulations apply to offline console and other non-mobile video games. China also provided no input on how it plans to handle workarounds, such as children using play IDs from willing adults or foreign game servers.
From an economic perspective, forecasters have questions about China’s long-term economic goals. With each new tech restriction, China destabilizes its own economy and others. In July, China attacked online education companies, including Gaotu Techedu and TAL Education, by banning them from making any type of profit when they offer core school subjects in a tutoring environment. The government claimed that paid tutoring placed an unnecessary time burden on students and a financial one on parents. The market experienced an adverse impact in which the value of the education sector dropped by tens of billions of dollars in a short period of time from a more than $100 billion valuation to a $24 billion one.
Tech Companies Feel the Pain
Tencent Holdings Ltd., China’s largest game company, officially expressed its support of the restrictions, but behind the scenes the conglomerate faces an uphill battle to convince investors to continue to invest in Chinese tech interests as some Tencent shareholders dealt this week with severe financial losses since the news broke. Although Tencent’s gaming market in China only receives three percent of its revenues from the country’s 62.5 percent of minors that play mobile games, some experts believe that this is just another of many waves of regulatory attacks against the tech company. NetEase Inc. also experienced massive stock hits this week.
Big Tech Under Investigation Worldwide
China’s actions fail to surprise anyone. Beyond the continued attempts of the Chinese government to exert more control over its sizable population, many world governments have revealed wavering trust in the technologies that people rely upon every day. Around the world, healthcare providers, researchers and governments have questioned for years the amount of influence that tech companies have on people’s lives and the overall health of nations.
Companies with global dominance like Google and Facebook now face antitrust lawsuits and investigations into whether or not they use their technological advancements to actively socially engineer people to behave certain ways beyond basic advertising and marketing considerations. These companies face increased scrutiny because of their ability to adversely influence individual and group mindsets, national and international payment systems, the stability of economies and election outcomes.