Chinese regulators restrict game monetization, driving Chinese game stocks down

Do You to want has get THE last game industry news right has your mailbox ? Sign up For OUR every day And weekly newsletters here.

China has has been difficult on Games In recent years And It is regulators to have NOW crack down on monetization, Sending in progress THE walk value of both Tencent And NetEase down.

Reuters said THE new rules limit expenses by players on online Games And institute A to forbid on every day to log in rewards, first time purchase bonuses And any of them incentives game developers create For repeat spenders. This come in the middle of A to slow down In THE game industry And layoffs by a lot businesses.

THE drop In THE walk value East sinister as both Tencent And NetEase to have has been heavy investors In THE Games industry, particularly as they extended beyond Asia In THE West. If that source of funding dried up, SO game startups around THE world could feel THE impact.

Ten cents action fell Since $40.45 A share on THURSDAY has $36.47 A share on Friday. It is always value $345.69 billion, but down ten% Since A day earlier.

NetEase action fell Since $104.43 A share has $87.64 A share. THE business East value $56.52 billion, down 16% Since A day earlier.

China Also said that game creators can't offer based on probabilities chance draw features has minors — maybe putting boundaries on something called In THE industry as “gacha.” Booty boxes to have long has been controversial In the game, And NOW editors are banned Since allow auction of And speculation on Stake articles.

On high of that, Games In China must NOW store their data on waiters In side THE borders of China. That could be A non-starter For those concerned about monitoring of people inside of China Or even those out of THE country, given THE Chinese Governments extensive monitoring system.

THE changes are In A public goodbye period until January 22. In previous regulatory repressive measures, China had Also slow motion down THE approval of game launches In China And he had Also limit THE time that Chinese youth could play Games has just A little hours A week.

Lisa Como Hanson, president of Niko The partners, said She waits A plot of impact on THE game economy, including A impact on Games with high average income by user (ARPU) THANKS has booty boxes. As For THE game giant investments, Como Hanson said, "I don't do it know if they budget For investments out of species Or THE fluctuating walk cap. My guess would be be out of species, And that This would be inspire Tencent And others has keep to diversify worldwide. »

In A message has clients, Niko The partners said THE National Press And Publication Administration of China (NPPA) published A draft guideline title "Measures For THE Administration of Online Games" on December 22, 2023.

THE draft regulations, if imposed, would be be THE most complete And scanning regulations Since additional restrictions were imposed on Chinese youth players In September 2021, Niko The partners said. THE new draft guidelines include 8 chapters And 64 articles describing All Since changes has game approvals has expenses boundaries. THE draft East below goodbye For THE following 30 days, which allow For stakeholders has provide back And changes has be implemented.

"THE current draft States that if THE regulatory changes are approved, they are Currently program has go live on A undecided date In 2024,” Niko The partners said. "THE majority of THE articles listed In THE draft guidelines simply repeat Or clarify existing video game walk regulations. However, THE draft Also understand new regulations, which if implemented, would be to have A significant material impact on video game business earnings And walk growth. »

On THE other hand, Como Hanson believes THE new rules mean that China regulators will TO DO the decisions faster on approving new Games For THE Chinese walk, And that will be...