China to increase curbs on video gaming industry

China is to bring in new rules that will limit the amount of money and time that people can spend on video games.

The restrictions are aimed at limiting in-game purchases and preventing obsessive gaming behaviour.

The draft legislation is a blow to the world’s largest online gaming market, which is still recovering from a previous crackdown.

The news sent shares in tech giants tumbling and wiped tens of billions of dollars off their value.

The planned curbs also reiterate a ban on “forbidden online game content that endangers national unity” and “endangers national security or harms national reputation and interests”.

Beijing first moved against the gaming sector in 2021, ruling that online gamers under the age of 18 would only be allowed to play for an hour on Fridays, weekends and holidays.

But the latest raft of restrictions goes further.

Online games must not offer rewards that entice people to excessively play and spend, including those for daily logins and topping up accounts with additional funds, said the industry regulator, the National Press and Publication Administration (NPPA).

“The removal of these incentives is likely to reduce daily active users and in-app revenue, and could eventually force publishers to fundamentally overhaul their game design and monetisation strategies,” said Ivan Su, an analyst at Morningstar.

Pop-ups warning users of “irrational” playing behaviour are also set to come into force.

China is the world’s largest gaming market, and Tencent is the global leader in the sector in terms of revenue. The company dominates the Asian market and has invested in game studios across the world.