China’s gaming industry faces heightened regulatory pressure as the National Press and Public Administration (NPPA) introduces a draft of restrictive rules aimed at curbing excessive spending and time on online games. Key proposals include limiting in-game expenditures, prohibiting daily login and in-app purchase rewards, and banning probability-based features for minors.

The NPPA is soliciting feedback from Chinese game companies until January 22, 2024, regarding these proposed regulations. Analysts anticipate a potential decline in daily active users and in-app revenue, leading to significant market value losses for tech giants like Tencent and NetEase.

Despite the regulatory challenges, the NPPA has approved a substantial number of new games, both domestic and foreign. In a surprising move, 105 domestic games, including Tencent’s Counter War: Future and NetEase’s Firefly Assault, received approval on December 25. This signals a departure from a previous freeze in 2022 and a willingness to avoid another licensing crackdown.

Moreover, the NPPA plans to expedite the licensing process, aiming for a 60-day approval window, significantly shorter than the current prolonged waiting periods. In 2023, a total of 1,075 games received approval, reflecting the government’s effort to balance regulatory control with the industry’s growth. Analysts speculate that this regulatory shift may influence other countries to adopt similar measures against mobile games, potentially reshaping the global gaming landscape.

Source: adapted from an article by Evgeny Obedkov, Author for Game World Observer.