Beijing announced on Friday its intention to impose new restrictions on online video games to combat the phenomenon of addiction, shaking the world of technology where tens of billions of dollars in capitalization have disappeared.
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The new measures are aimed in particular at the acquisition of credits during the session in order to curb the phenomenon of gambling addiction, the regulator explained. The country represents the world's largest video game market.
That announcement immediately sent Chinese tech giants in the sector crashing on the stock market, led by global leader Tencent, whose shares fell 15% in Hong Kong.
According to the financial agency Bloomberg News, the group suffered a capitalization loss of no less than $54 billion.
Another giant in the industry: Netease's share price fell by more than 30%, the company XD by about 15% and the Chinese e-commerce giant Alibaba by 1.8%. By then, the Hang Seng index was on an upward trend and fell by 4%.
The Chinese government began cracking down on the sector in 2021 as part of an overall tightening of regulation on the country's tech giants.
In particular, Beijing has strictly limited the amount of time children can play online and froze marketing permits for new games for months.
Recently, however, the industry has hoped that Beijing would now be more lenient towards it.
The draft regulation announced on Friday proposes limiting wallet top-ups in games and eliminating game-time extension features often offered as a reward for regular connections.
“Pop-up” alerts are also expected to appear warning players that they are behaving “irrationally.”
“Turn the screw”
The regulator announced last year that China had “solved” the problem of gambling addiction among young people.
But the new measures “seem to suggest that the overall tightening of technical pressures is continuing and could become even more aggressive,” Pepperstone analyst Michael Brown told AFP.
Since 2021, playing time for minors during school hours has been limited to three time slots from 8 p.m. to 9 p.m. on Fridays, Saturdays and Sundays. An ID card is required.
For Mr Brown, the move that caught the sector by surprise may be motivated by a desire to redirect consumer spending to other sectors amid the economic slowdown.
It may also aim to encourage more young people to look for work, as the unemployment rate for 16-24 year olds hit a record 21.3%, according to the latest figures released in June.
Meanwhile, the text “hits the vast majority of gaming operators in China hard” and will force them to “completely review their monetization models,” estimates Zeng Xiaofeng of Niko Partners in an interview with Bloomberg.
However, the new measures could prove beneficial for independent creatives focused on high-end and innovation, believes Cheng Gong, CEO of studio Hanjia Songshu.
“There was a bit of a feeling in the industry that bad money was chasing good money,” he told AFP, with advertising escalating to attract as many players as possible at the expense of creativity.
The draft regulation also reiterates the ban on online gambling content that endangers “national unity” or “national security” or “harms the reputation and interests of the country.”