China Massively Disrupts Game Industry Monetization

The Chinese government have just announced new regulations that will have a MASSIVE impact on the world of game development. It immediately resulted in huge stock market losses for China’s two largest gaming companies Tencent and NetEase.

The announcement is a crackdown on “gacha” style monetization strategies, loot boxes and battle passes. Details of the regulations:

The new rules, which will effectively set spending limits for online games, sparked panic among investors, wiping off nearly $80 billion in market value from China’s two biggest gaming companies, as investors sought to gauge the potential impact on earnings and more restrictions in the offing.

Online games will now be banned from giving players rewards if they log in every day, if they spend on the game for the first time or if they spend several times on the game consecutively. All are common incentive mechanisms in online games.

As well as:

Games are also banned from offering probability-based lucky draw features to minors, and from enabling the speculation and auction of virtual gaming items.

But the new rules included a proposal that is widely expected to be welcomed by the industry, requiring regulators to process game approvals within 60 days.

Meanwhile, Chinese regulators announced on the same day licences for 40 new imported games for domestic releases, seen as a signal of Beijing’s willingness to allow more games in the country, despite the draft rules on game spending.

Full details are available in the source Reuters article as well as in the video below.

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