China introduces new limits to curb in-game spending and incentives

by Danny Craig  · 
China introduces new limits to curb in-game spending and incentives

The Chinese government has announced several new rules for companies to follow to cut spending in online games, sending shares of two of the world's largest publishers tumbling.

The details:

  • China's new online game guidelines were revealed this week, limiting the amount of in-game currency players can purchase, prohibiting the inclusion of daily login rewards, and preventing games from providing an incentive for purchasing items for the first time or purchasing multiple bundles. Probability-based luck draws are also forbidden, and anyone who streams the games cannot benefit from receiving "significant" donations.

  • The announcement of the rules had an immediate impact on Tencent and NetEase, two of the world's largest game publishers, causing them to lose a combined $80 billion in value. Tencent's $54 billion drop amounted to roughly 16% of its share value, whereas NetEase suffered a 30% drop, according to Bloomberg.

  • The debate over "predatory" microtransactions and other extra spending in both free-to-play and premium games has been going on for a while, but China has also focused its efforts on combating video game addiction and games that don't fit its "values." In 2021, it implemented new restrictions for those under the age of 18, limiting playtime on Fridays, weekends, and public holidays to one hour, and tightening its guidelines on allowed content in games.

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