- The new Chinese national regulations limit youth play time to 3 hours for most of the year—a major improvement compared to the previous 1.5 hours per day limit.
- The escalating restrictions on Tencent’s largest business may scare investors.
- The share prices of Naspers and Prosus took a hit on Monday.
China will ban minors from playing games for more than three hours for most of the year, and will implement the strictest youth entertainment control to date in the world’s largest mobile game field.
Game platforms such as Tencent and Netease will only be able to provide online games to minors from 20:00 to 21:00 on Fridays, weekends and public holidays. The state news agency Xinhua Report, Citing a notice from the State Administration of Press and Publication. The new rules limit youth play time to three hours for most of the year, which is a major improvement over the previously set limit. 2019 year On most days, 1.5 hours a day.
Escalating restrictions on Tencent’s largest business may scare investors who have returned to Chinese stocks cautiously in recent days, after a series of regulatory investigations in areas ranging from online commerce to data security and ride-hailing triggered a multi-trillion-dollar sell-off. , They are looking for bargains. The past few weeks.
NetEase fell as much as 7% in premarket trading in New York, while Prosus, the largest shareholder of Tencent, fell more than 2% in JSE. Naspers fell nearly 2%.
“Three hours a week is too stressful. Such a policy will also have a negative impact on Tencent,” said Steven Leung, executive director of UOB Kay Hian (Hong Kong). “I think the regulatory measures will gradually rest, but it will not stop at all. This will definitely hurt the emerging technological rebound.”
Tencent and other companies say that minors account for only a small part of their business, especially after recent restrictions. China’s largest gaming company said that minors’ income is less than 3% of its total gaming revenue in China.
Other key points in the new rules include:
- All online games should be connected to the national anti-addiction system, and enterprises must not provide services to users who have not registered with their real names
- Regulators will step up inspections of how game companies limit game time and in-game purchases
- Regulators will work with parents, schools and other members of society to combat youth game addiction.
The new regulations emphasize the extent to which Beijing is committed to curbing young people’s addiction to gaming and pushing its future workforce to pursue more efficient jobs.Earlier this month, the official media published strong criticisms of the industry and once labeled the game “Spiritual opium.” The description was later deleted, but due to concerns about further restrictions, the stock price plummeted.
In 2018 and 2019, Tencent was struggling to cope with a wide range of crackdowns in the gaming industry, and then focused on child myopia, while also struggling to cope with the massive tightening of regulations in areas such as social media, online finance, and commerce.
It took the initiative to reduce the number of hours that minors play games, but the company is not as strict as the new government regulations. It limits minors to one hour on working days and two hours on holidays and holidays.
“Since 2017, Tencent has explored and applied a number of new technologies and new functions in the protection of minors,” Tencent said in a statement. “This will continue because Tencent strictly complies with and actively implements the latest requirements of the Chinese authorities.”
“Tencent, NetEase and other Chinese online game companies may have a slight impact on their financial performance due to the tightening of the time limit for minors to play games to three hours a week. Players under the age of 16 only account for 2.6% of Tencent’s total domestic revenue Bloomberg Information analysts Matthew Canterman and Tiffany Tam said that in the second quarter, game spending for those under 12 was only 0.3%, but profit margins may be squeezed in the near term to speed up compliance measures. roll out.
