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Chinese tech groups hit by limits to online gaming access for children

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Games industry updates

Chinese children will only be allowed to play video games for one hour on Fridays, Saturdays and Sundays in fresh curbs set to hit gaming providers such as NetEase and Tencent.

The latest rules published in Chinese state media on Monday come amid a wide regulatory shake up of the country’s technology industry that has wiped tens of billions off the market value of its biggest players.

Under the regulations, online gaming companies can only allow children to play between 8pm and 9pm on Fridays, Saturdays, Sundays and holidays. Gaming companies are required to enforce the rule by using real name registration systems and login requirements.

Chinese state media said the move was to protect the mental and physical health of minors, defined as under-18s, and to prevent overindulgence in online gaming.

Daniel Ahmad, a gaming analyst at Niko Partners, said it was an “extremely restrictive policy”.

“There are around 110m minors in China that play video games today,” Ahmad said. “According to Tencent, players under 16 account for approximately 2.6 per cent of its total player spend, which shows the overall impact won’t be too significant, but it’s still a notable chunk.”

In the second quarter of this year, Tencent’s mobile gaming revenue rose 12 per cent to Rmb43bn ($6.6bn). Its overall revenue for the quarter was Rmb138bn.

Martin Lau, Tencent’s president, has warned of an increasingly tough regulatory environment. He said the company was “very focused” on reducing the amount of time and money children put into gaming. “It’s a complicated issue requiring consensus of the regulator as well as the industry . . . It also requires a system to police it but from the practicality perspective, it’s actually do-able,” he said.

Tencent has previously curbed the duration that minors are allowed to spend gaming on its flagship title Honor of Kings each day from 1.5 hours to one hour normally and from three hours to two hours on holidays. They said the rule would then roll out to the rest of its games line-up. Companies are also looking to deploy facial-recognition technology to stop young people avoiding regulations.

The move came after a Chinese state media group briefly labelled gaming as “spiritual opium” before withdrawing the comments. The article also complained of widespread internet addiction among China’s youth.

Chinese internet giant NetEase was also affected by the changes. The company’s US-listed shares were down 8.4 per cent in pre-market trading.

Additional reporting by Hudson Lockett in Hong Kong

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