On December 22nd, the State Administration of Press and Publication drafted the "Measures for the Administration of Online Games" (draft for soliciting opinions) for public consultation.
According to the China News, Publication, Radio and Television News, the relevant person in charge of the State Administration of Press and Publication stated that the draft for soliciting opinions is based on ensuring and promoting the prosperity and healthy development of the online game industry. It clarifies the issues of access to online game operating units, establishes a "Guarantee and Reward" chapter, and proposes a series of incentive measures. At the same time, regulations have been made to protect the rights and interests of minors and consumers. During the process of drafting the draft for soliciting opinions, opinions from relevant departments, industry associations, enterprises, and other parties were widely solicited through various means. The person in charge stated that soliciting public opinions on departmental regulations is a process of wider listening to opinions and improving the provisions of the regulations. The State Administration of Press and Publication will carefully study the concerns and opinions raised by all parties regarding Article 17, Article 18, and other contents of the draft for soliciting opinions, and will further revise and improve it on the basis of continuing to listen to the opinions of relevant departments, enterprises, users, and other parties.
According to the draft for soliciting opinions, Article 17 [Prohibition of Compulsory Battle] Online game publishing and operating units shall not set up compulsory battles in online games.
Article 18 [Restrictions on excessive use and high consumption of games] 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. Pop up warnings and reminders should be given to users for irrational consumption behavior.
A senior gamer previously told The Paper that if the daily login gift package is free, it is already a free benefit for gamers, and there is no need to limit it. The first charge gift package is usually a few yuan, which is a discounted gift package that players have always kept. These two restrictions will actually result in fewer benefits for "non cryptocurrency" or "micro cryptocurrency" players.
Several gaming industry insiders have analyzed to Pengpai News reporters that the above regulations will have an impact on the monthly active quantity, recharge flow and other data of the game. Generally, the initial recharge amount set by game companies is about 6 yuan, which is also an important means to guide users to recharge. Once banned, it may reduce the number of players who spend money. The term "All online games must set user recharge limits" focuses on games that rely heavily on high consumption players, including most MMO (multiplayer online games), SLG (strategy games), anime and other games. However, some industry insiders have stated that it is difficult to provide a unified standard for the specific recharge limit, so this regulation still needs to be considered at the specific implementation level. However, it will undoubtedly have an impact on some "heavy spending" games.
However, another senior executive of a gaming company pointed out to a reporter from The Paper that regulations such as "no daily login allowed" have little impact on the operation of online games. What is more noteworthy is the clauses that restrict recharging, which are not marked as only for minors. Therefore, it is likely to also impose restrictions on adult recharging, which will also have an impact on a wide range of gaming companies, It is currently unclear whether it is the account limit or the ID card limit, and further clarification is needed regarding the relevant details.
On December 22nd, A-share and H-share gaming stocks experienced a sharp decline. According to Wind data, the online gaming index fell 9.76%, leading the decline in the concept sector. In terms of individual stocks, Gilbert (603444) fell 26.76%, Glacier Network (300533) closed down 17.28%, Kunlun Wanwei (300418), Baotong Technology (300031), Shengtian Network (300494) and others fell more than 10%, while Yaoji Technology (002605), Dianhun Network (603258), and Sanqi Interactive Entertainment (002555) hit the limit.
In terms of Hong Kong stocks, NetEase (9999. HK) closed down 24.6%, Heartbeat (2400. HK) fell 19.01%, China Mobile Games (0302. HK) fell 16.78%, NetEase (0777. HK) fell 13.78%, Tencent Holdings (0700. HK) fell 12.35%, Bilibili (9626. HK), Chuangming Tiandi (1119. HK), Huoyan Holdings (1909. HK), Feiyu Technology (1022. HK) and others fell more than 7%.
"The 'Draft for Soliciting Opinions' has extremely precise and targeted observations on pain points in the gaming industry." A chief analyst at a securities firm told The Paper, "If the officially introduced management measures are strictly implemented according to this, it is expected to cover most game manufacturers in the industry and have a wide impact on the entire gaming industry."
Extended Reading
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