Tencent, which is pound-for-pound the second-largest games company on Earth, recently suffered a monumental blow. Following the publishing of new guidelines by China’s government, those dabbling in the online gaming market found their stock value plummeting overnight. Tencent took a hit of around 15.7%, which was equal to a whopping $54 billion. These new guidelines, aimed at curbing excessive spending in online games, also impacted the likes of NetEase, which suffered from a 28% drop in share value.
As China’s government seeks to control exorbitant rates of spending in online games, the National Press and Publication Administration published new draft guidelines. There were several key rules outlined in these proposed rules, all of which are aimed at protecting impressionable, young, or vulnerable gamers who can all too easily develop an addiction to spending on microtransactions.
China Wants To Control It
Games like State of Survival could be targeted by the new rules
In recent years, the popularity of free-to-play games has skyrocketed. We’ve seen dozens of top-tier titles surface, all of them pulling in millions of users with ease as a result of their intense accessibility. However, there’s one known fact that makes the rise of free-to-play games a little threatening. In almost every circumstance, free-to-play games are backed by microtransactions – that’s how they stay afloat.
Typically, these microtransactions exist in the form of cosmetics packs, boost bundles, tier skips, and the new favourite in recent years – the ‘battle pass’. In the slew of free-to-play mobile games that are available, microtransactions can be sold for as little as $0.99 but can quickly ramp up to bear price tags as high as $200. For those who aren’t willing to grind in these games, buying a few packs seems all too easy – but it’s a slippery slope.
Here are some of the games we’re referring to:
Forge of Empires
Genshin Impact
State of Survival
Clash of Clans
Hero Wars
Fallout Shelter
Rise of Cultures
Candy Crush Saga
China’s government is targeting these games and how they operate in the new guidelines that were recently published. In one fell swoop, China seeks to eliminate addicting tactics, excessive microtransactions, and unlimited spending in online, free-to-play games.
What Are The New Guidelines?
In the new guidelines, the following rules were proposed:
Online games need to set spending limits, restricting the ability to purchase unlimited packs
Online games must ban daily login rewards, eliminating FOMO behaviour
Players who livestream these games must be restricted from receiving large tips
Online games must not offer probability-based luck draw features to minors
Online game approvals are required to be processed by regulators within 60 days
In a recent report by Bloomberg, it was stressed that from the moment these new measures were revealed, Tencent’s share price plummeted, with the firm losing as much as $54 billion. Plenty of Tencent’s games and brands boast the very features and mechanics that are being targeted by the Chinese government.
Do you believe that these changes will be effective at curbing potentially harmful spending in free-to-play games?
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