China’s government has launched an open crusade against online gaming, a hobby that Chinese officials accuse has become an addiction among young people. On Monday, authorities in Beijing announced that they would ban minors from spending more than three hours a week in this activity, described in early August by state media as “spiritual opium”. With this decision, video games are once again in the crosshairs of Beijing regulators, who point to the most powerful argument for restricting them the harmful effect they have on those who will be the engines of society in the not-too-distant future.
The State Administration of Press and Publications, the regulatory body for print and digital publications in China, specified in a statement that online video game companies can only allow under 18s to access their content from 8:00 am to 9:00 pm on Fridays, Saturdays , Sundays and holidays. Likewise, he announced that the frequency of inspections of these companies will increase, in order to verify if strategies against gambling addiction are being implemented effectively. Companies will also be strictly prohibited from providing any other type of service to minors outside these hours and must verify the real identity of users, to prevent the same person from registering different accounts under a pseudonym.
The text also highlights that the advisors of this guideline will work with families, schools and other actors in society responsible for the formation of new generations. In this regard, the official Xinhua news agency echoed the statements of a spokesperson for the institution: “Adolescents are the future of our motherland. Protecting the physical and mental health of minors is one of our people’s vital priorities.”
The Asian giant had already limited in 2019 the total time that minors could access online video games to 90 minutes a day and three hours during the holiday season. According to statistics published by the official media, 62.5% of Chinese children and teenagers gamble on the internet more often than previously stipulated, and up to 13.2% of these users did so — at least so far — more than two hours a day in school activity days.
With more than 665 million players, China is the world’s biggest video game market, a sector that, in the current situation of the pandemic outbreak, has only grown. Its turnover in 2021 is estimated to be around $41.7 billion, a forecast that will likely be affected if regulation achieves the impact that authorities expect. Second report released in mid-August by the German portal statist, the expectation is that by 2025 — also assuming that the trend of the last decade continues — sales will increase to 60.3 billion. The same source points out that mobile games account for 84% of sales in the Chinese market, proof that the control work will not be limited to the confined space of the home and will require, in addition to parental supervision, other adults.
Following the announcement, shares in Dutch technology investment company Prosus NV, with a 29% stake in Tencent, fell 1.45% on the Euronext Amsterdam stock exchange, while European video game companies Ubisoft and Embracer fell 2%. Before the opening of Monday’s session on the Wall Street exchange, shares of Chinese companies NetEase and Bilibili had already fallen by more than 6% and 3%, respectively. The new measures also coincide with recent restrictions the government has imposed on several of its tech giants, such as Alibaba and Didi, all as part of a new campaign to control key sectors of the national economy.
In the middle of the month, the newspaper Economic Information Daily, under the umbrella of Xinhua, published an article criticizing the video game industry and calling honor of kings, Tencent’s mobile game of “spiritual opium”. Although the qualifier was later removed from the text without any explanation, the economic blow was inevitable: Tencent and NetEase shares fell more than 10% in the first trades of the Hong Kong Stock Exchange.
As a result of the debate that this phenomenon of game addiction has unleashed in society, Tencent, owner of the “super app” WeChat, had already started to reduce the time that minors can play video games before the Government opted for this new grip. “Since 2017, Tencent has been exploring and applying new technologies and functions for the protection of minors (…) We will continue to do so. Tencent strictly complies with and actively implements the requirements of the Chinese authorities,” the company said in a statement after inflammatory comments from the Economic Information Daily.
In July, the company announced that it would begin using facial recognition technology to identify minors who play video games at night and threatened to expel those who violated the rule from the platform. The initiative, known as Midnight Patrol, aims to prevent children and teenagers from using their parents’ mobile devices to circumvent the ban. To do so, they check the photos that users upload when they register with the country’s social security system.
The short- or medium-term consequences of the current policy for Tencent, NetEase and other area heavyweights may not be as alarming if Bloomberg’s predictions materialize, with players under 16 accounting for just 2.6% of the total received by Tencent in the first half of this year, while children under 12 accounted for only 0.3%.
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