Hong Kong / Beijing (CNN Business) – China has banned online players under the age of 18 from playing on weekdays and limited their gambling to just three hours on most weekends, representing a significant escalation of restrictions in the country’s huge gambling industry.
Starting this week, minors will be allowed just one hour of playtime between 8 p.m. and 9 p.m. on Fridays, weekends and holidays, according to a statement from the Chinese media watchdog. , the National Press and Publications Administration (NPPA), which was published by the state-run Xinhua news agency on Monday.
The move represents a massive tightening of limits previously set by the agency in 2019, which had restricted play to 90 minutes on weekdays and three hours on weekends for children. Authorities said the restrictions were put in place to help prevent young people from becoming addicted to video games.
The NPPA said this week that the rules will be issued “at the beginning of the new semester. [escolar], setting specific requirements to prevent addiction to online games and protect the healthy growth of minors “.
Investors reacted quickly. NetEase (NTES) fell 3.4% during normal business hours in New York on Monday. Tencent (TCEHY) suffered roughly the same decline in Hong Kong on Tuesday before rising again by 1.6%.
A growing repression
In recent months, China has embarked on a major crackdown on private business, involving some of the country’s major players. Initially, it seemed that the regulators’ main target was the booming tech sector, but lately it has expanded to reach other industries, such as private education.
Alicia Yap, an analyst at Citi, said she expected the impact of the latest restrictions on gambling companies to be “minimal”, with a less than “low single digit” impact on China’s revenue for both Tencent and NetEase.
“That said, we believe this will continue to represent another setback for the industry and potentially send another wave of negative sentiment to the market and lower overall investor expectations for future growth in the gaming industry,” he wrote in a note to clients. on Tuesday.
At a press conference on Monday, an NPPA spokesman said the strict new restrictions were in response to complaints from parents.
“Many parents said that teenagers’ addiction to online games seriously affected their studies, and their physical and mental health, causing a series of social problems, causing many parents to suffer,” said the unidentified representative, according to a report. from Xinhua.
In recent years, the Chinese government implemented a registration system that required people who played computer games to play computer games under their real names, allowing companies to verify them.
This week, it reiterated that policy, and the NPPA noted that “online gaming companies will not provide gaming services in any way … to users who have not registered or logged in with their real names.”
In a statement Tuesday, Tencent said it had been working on “various new technologies and functions for the protection of minors” since 2017.
“That will continue as Tencent strictly complies with and actively implements the latest requirements of the Chinese authorities,” the company added.
Tencent has previously noted that the amount of income it earns from minors is relatively small. In his most recent earnings presentation, he said that players under the age of 16 accounted for only 2.6% of his gross gaming income in China.
Martin Lau, the president of the company, also said at the time that “there are a lot of new regulations coming, but we are pretty confident that we can comply with them.”
The Chinese tech giant had already made headlines earlier this month for announcing limits on the amount of time minors could spend playing the company’s online games, such as the popular title “Honor of Kings.”
Under these rules, minors can play the game for only two hours on holidays and one hour on other days.
That statement came after a Xinhua-owned newspaper published a lengthy analysis that used terms such as “spiritual opium” and “electronic drug” to describe the harmful effects of games on children.
NetEase did not immediately respond to a request for comment.
The new rules sparked protests on Chinese social media, where many users complained that they were too strict.
“This policy assumes that games are bad,” wrote a user on Weibo, the Chinese platform similar to Twitter.
Some also pointed to the drawbacks of imposing a blanket ban, suggesting that there should be rules that apply to “different types of games and minors of different ages.”
“They are equal [las edades de] 7 and 17 years old? “Asked another Weibo user.
Others were concerned that the country would ultimately be left behind in the world of competitive gaming.
“So China has no future for esports. It is impossible for teenagers to train,” wrote a third Weibo user. “Children from other countries will win the world championship at 17, while we started playing at 18.”
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