China has announced a series of rules aimed at limiting spending and banning bonuses that encourage gambling and excessive spending.
The new rules represent a blow to the global gambling market, which is still recovering from previous government measures against the industry.
China's gaming market is growing again this year. Tencent reported an 11% increase in revenue in the first three quarters of the year, driven by growth in advertising and game sales, while rival NetEase's revenue rose 7%. Same period.
This strong growth comes on the heels of a recession in 2022, when total revenues in China's gaming industry fell by 10.3% annually due to economic problems, slowing user growth and regulatory controls.
New rules set consumption limits for the game. If a player logs in daily, spends money on the game for the first time, or spends money on the game several times in a row, they are prohibited from offering bonuses.
After the State Administration of Press and Publication issued the draft new regulations, Tencent's stock price fell by about 16% and its competitor NetEase's stock price fell by about 25%.
Beijing has continued to tighten video game regulations over the years, imposing strict limits on playing time for players under the age of 18 in 2021, and suspending approval of new games for about eight months over concerns about gambling addiction.
The event officially ended last year with the resumption of approval of new games, although organizers continue to impose restrictions to limit spending on games.
The new rules aim to limit in-game spending and require games to limit the amount players can spend in-game and ban bonus features.
Games are also prohibited from offering odds-based lottery functions to minors and from speculating and auctioning off virtual game items.
The new rules include a gambling industry-friendly proposal that would require regulators to process gaming permits within 60 days.
The new rules highlight Beijing's concerns over user data as they force game makers to store their servers in China.
The State Administration of Press and Publications is now seeking public opinion on the draft new regulations. The deadline runs until January 22, 2024.