Chinese Authorities Rethink Game Regulation Stance to Bolster Economy

Signs have been detected that Chinese authorities could withdraw the previously announced strict game regulation policy. The stock prices of domestic game companies, which have a high dependency on the Chinese game market, are also rising across the board.

China’s National Press and Publication Administration (NPPA) removed the draft regulation of the ‘Online Game Management Method’ that was registered on its official website on the 23rd. The regulation previously announced that this NPPA contained strict rules on the business model (BM) commonly used in the gaming industry. It included prohibiting promotions encouraging continuous logins, the first game money charging, continuous charging, the prohibition of loot box items, and setting a limit on game money charging.

The NPPA announced that it would decide whether to implement the final regulation by the day before after collecting opinions from the industry. Still, the post was deleted without any announcement. The NPPA has not provided any particular reason for deleting the post.

The Korean domestic game industry is also responding positively to this temperature change by the Chinese authorities. According to the ‘White Paper on Game 2022’ published by the Korea Creative Content Agency, as of 2021, China accounts for 34.1% of Korea’s game exports, ranking first by a large margin. Despite the inconsistent game policy of the Chinese authorities, domestic game companies have pursued policies of diversification and withdrawal from China. However, the proportion of game exports to China still overwhelmingly leads with a 17.1% point difference from Southeast Asia, which ranks second.

Upon hearing this news, domestic game stocks also rose across the board. As of the previous day’s closing price, WeMade rose 4.0%, NCSoft 3.8%, Com2uS 2.6%, Netmarble 2.8%, and Krafton rose 4.0%.

In the industry, there is an observation that signs of change in China’s strict regulation policy direction are being detected. Jang Hyun Guk, the representative of WeMade, explained, “The stance of the Chinese authorities on the game industry has returned to a promotion policy since November 2022, and the Chinese economy is not what it used to be, so the Chinese government also needs to stimulate the economy. They see the game industry as an important means. It’s not easy for any government to admit that a policy implemented once is wrong. However, we can understand the authorities’ intentions from dismissing the person in charge who made the draft regulation.”