"Suffering from suffocation, the most I buy is gaming stocks, and I have dropped 10 points directly on my end." On the afternoon of December 22nd, a shareholder with a heavy stake in gaming stocks told a reporter from the Huaxia Times. After sending the above information, she immediately told the reporter, "A stock has already hit the limit down."
A policy solicitation draft triggered a sharp drop in gaming stocks. On the afternoon of December 22nd, the General Administration of Press and Publication released the "Draft Measures for the Administration of Online Games (Draft for Comments)" (hereinafter referred to as the "Draft for Comments") for public consultation, requiring online games not to set up inducement rewards. One stone stirred up a thousand waves, and A-share and Hong Kong stock gaming stocks opened in the afternoon with a sharp drop.
Inducing rewards shall not be set
In this draft of opinions, Article 18, which restricts excessive use and high consumption of games, is the most concerning. The specific requirement is that online games shall not set up inducement rewards such as daily login, first recharge, and continuous recharge. Online game publishing and operation units shall not provide or condone high priced transactions of virtual props in the form of speculation, auction, etc.
"All online games must set a user recharge limit and make it public in their service rules. For users' irrational consumption behavior, pop-up warning reminders should be provided." The "Draft Opinion" also pointed out.
It is worth noting that for game recharging, there were previously only regulations for minors. According to the Notice on Preventing Minors from Indulging in Online Games, it is not allowed to provide game payment services to users under the age of 8; The game payment services provided by the same online gaming enterprise, for minors aged 8 and above but under 16 years old, the single recharge amount shall not exceed 50 yuan, and the cumulative monthly recharge amount shall not exceed 200 yuan; Minors aged 16 and above shall not exceed 100 yuan in a single recharge, and the cumulative monthly recharge amount shall not exceed 400 yuan.
This means that this draft of opinions is the first to impose restrictions on all game consumers. Regarding this, game industry analyst Zhang Shule told Huaxia Times reporters that avoiding irrational consumption and blocking potential social controversies in the game industry is essentially encouraging game manufacturers to stick to users through innovative gameplay experiences, rather than using marketing methods to trap users
"If the gameplay experience is good enough, why use some reward methods to 'force' users to clock in?" Zhang Shule further stated that some mainstream premium games will not have this problem, mainly some counterfeit and skin changing games, such as the rampant legendary games, relying on tricks to attract users and stimulate consumption, which will have a significant impact.
In addition, the Opinion Draft also sets penalties for violations of online game content. The specific content is that for publishing and operating online games that contain many prohibited contents such as inciting ethnic hatred and discrimination, spreading rumors, disrupting social order, and disrupting social stability, in accordance with Article 62 of the Publishing Management Regulations and Article 20 of the Internet Information Service Management Measures, the competent publishing department shall order the deletion of relevant content and make corrections within a specified period of time, confiscate illegal gains, Those who engage in illegal business activities with an amount exceeding 10000 yuan shall be fined not less than 5 times but not more than 10 times the amount of illegal business activities; If the illegal business amount is less than 10000 yuan, a fine of no more than 50000 yuan may be imposed; If the circumstances are serious, the applicant shall be ordered to stop applying for a license plate within a specified period of time, suspend business for rectification within a specified period of time, or the publishing authority shall revoke the Network Publishing Service License; If a crime is constituted, criminal responsibility shall be pursued in accordance with the law.
In the eyes of industry insiders, currently it is still a draft for soliciting opinions, but if it is implemented, it will have a significant impact on the profitability of game companies.
"Once the height limit is implemented, it will indeed have a certain impact on the revenue of domestic game companies that are basically free games and prop payment models, especially top companies with a large market share such as Tencent and NetEase," Zhang Shule further emphasized, but this impact will not be too long-lasting, especially for games with a large user base, The strategy of reducing game props prices (which itself has no cost) can help more free users become paying users, forming a long tail. In fact, NetEase had already issued a price war card before, which happened to hit the target of this demand.
Game stocks plummet
Although the draft of opinions is still in the solicitation stage, it triggered a huge shock in the secondary market, and Hong Kong and A-share gaming companies quickly plunged after the midday opening.
On December 22nd, the Hang Seng Index in Hong Kong closed down 1.69%, while the Hang Seng Technology Index fell 4.37%. Gaming stocks plummeted, with NetEase, Tencent Holdings, Bilibili, and Kingsoft experiencing declines of 24.60%, 12.35%, 9.67%, and 6.92%, respectively. It is worth noting that the 24.6% decline is the largest decline since NetEase went public.
At the same time, the stock price of Heartbeat Company fell by 19.01%, and the price of China Mobile Games fell by 16.78%.
In terms of A-shares, gaming stocks collectively fell, with individual stocks setting off a limit down trend. Over 10 stocks, including Century Huatong, Sanqi Interactive Entertainment, Perfect World, Gigabit, Giant Network, and Electric Soul Network, fell below the limit.
Tencent has responded to the new regulations on gaming by responding to a reporter from Huaxia Times. Since the release of the new regulations in 2021, Tencent has been strictly implementing management requirements. Currently, the gaming time and consumption data of minors are at the lowest level in history.
Tencent also stated that the draft of the new management measures for soliciting opinions does not fundamentally change key elements such as the business model and operational rhythm of the game. The regulatory authorities have released a draft of new management measures for soliciting opinions from the industry and society, believing that it is more conducive to the orderly and healthy development of the gaming industry.
According to sources from Heartbeat Company, after soliciting opinions on the new policy, if implemented, Heartbeat Company will definitely actively cooperate and implement it to promote the healthy development of the industry.
Regarding whether it will affect the company's profits, the above-mentioned Heartbeat Company personnel told reporters that there is currently no way to evaluate the impact of profits. The new policy has not yet released detailed rules on the recharge limit, such as the method and amount of restrictions on the recharge limit. Only after the specific rules are released can the company make a quantitative estimate to determine whether there is a significant impact.
"Heartbeat's self-developed games have never engaged in heavy or strong operational activities, such as how many items to give as a daily login, and how much money to redeem, so the prohibition of setting inducement rewards does not have a significant impact on Heartbeat." The Heartbeat person also emphasized.
In addition, multiple game companies have told reporters that they are further studying and analyzing policies.