On Friday, Chinese regulators unveiled a set of rules to control spending and incentives in video games, impacting the world’s largest gaming market that had recently seen growth.
These rules, essentially putting caps on spending for online games, caused concern among investors. Reported by Reuters, China’s top two gaming companies lost nearly $80 billion in market value as investors tried to understand how these rules might affect earnings and if more restrictions were on the horizon.
The proposed rules are strict and would eliminate daily login rewards, purchase bonuses like the “first-time purchase bonus,” and limit currency recharging. Players might also get warnings for spending too much in ways considered “irrational.” These practices are common in “gacha” games (like Genshin Impact), where players make luck-based purchases for essential in-game items and bonuses.
If these rules are put in place, major global mobile game developers could be directly affected. NetEase, known for games like Diablo Immortal, saw a significant 25% stock loss, and Tencent, with games like Tower of Fantasy and the upcoming Tarisland MMO, saw a 16% stock decrease.
According to the New York Times, the rules also cover national security. They say that servers and computers used for game development need to be in China. The rules also state that games should not have state secrets or put national security at risk.
The suggestions are still in draft form and may undergo changes following public and industry input, with the feedback periods extending until late January.