Chinese Govt Proposes Stricter Regulations and Approval for Games
With the ongoing government shake up that has led to the continued freeze of game approvals in China, the Chinese government has issued an official notice regarding the new proposed regulations around the gaming industry. With recommendations sent out to 8 different regulatory bodies, the government is rallying a concerted effort with the aim to reduce myopia rates in children by limiting screen time and usage of electronic devices.
The National Radio and Television Administration, the regulatory body which is responsible for approving and granting media licenses, has received three significant recommendations regarding the upcoming health initiative.
- to continue strengthening current regulations that limit the amount of time that minors can play games online,
- to investigate the implementation of an age ratings system for games, and
- to limit the number of new online games that are approved for distribution.
The third recommendation on the list, with its proposed limit on the number of new game approvals, will likely affect the games industry the most.
We think that if the third recommendation is implemented, smaller game companies with only a few potential hit titles would suffer more than larger ones. The top game companies would continue to strengthen their positions, as they have more AAA games, and more resources to support the game approval process. The export game market is more competitive, so more middle and small companies could go under if their game is not approved for domestic distribution.
While smaller companies may suffer under the new regulations, especially in regards to indie developers, the new limit on game approvals may help weed out spam titles and copycat games. But for overseas developers and publishers, this new regulation may cause more headaches, as they will now be competing toe-to-toe with domestic companies for the same licenses in addition to undergoing the lengthy and difficult approval process.
The gaming industry in China has been skyrocketing in recent years, with astronomical numbers across the board from total games revenue to rising Esports viewerships. While this bodes well for China financially, such unchecked growth does come with growing pains for the industry, one that has seen a rise of unhealthy and sometimes tragic incidents when it comes to issues such as gaming addiction.
The Chinese Government has already taken precautions against the gaming industry, as seen with the recent implementation of the "lootbox law", a law that was passed in hopes of raising consumer awareness on the gambling mechanics of gachas and lootboxes.
And while not an official law, the tech conglomerate Tencent had voluntarily implemented time restrictions for minors playing Arena of Valor, due to the reports of two tragic incidents that were caused by excessive gaming.
While the mandated time restrictions and license approval limits seem draconian, one could argue that the Chinese government does have good intentions, though their actions are misguided. The lootbox law, which encourages consumer transparency and awareness when it comes to the nature of gambling mechanics, is a preferable step in the right direction. Nonetheless, it will be interesting to see how China tackles the rising problems of the gaming world at large.
