China OKs 105 Online Games Days After Hitting Industry with Draft Rules

TAIPEI, TAIWAN — Chinese authorities approved 105 new online games this week, bolstering support for the industry just days after proposing regulatory restrictions that sent stocks tumbling.

The National Press and Publication Administration (NPPA) announced approval of the 105 games Monday via WeChat, describing the move as a show of support for “the prosperity and healthy development of the online game industry.

“It was only Friday that those same regulators announced a wide range of proposed guidelines to ban online game companies from offering incentives for daily logins or purchases. Other proposed rules include limiting how much users can recharge and issuing warnings for “irrational consumption behavior.”

The draft rules, which were published as part of efforts to seek public comment on the proposals, caused an immediate, massive blow to the world’s biggest games market, leading to as much as $80 billion in market value being erased from China’s two biggest companies, industry leader Tencent Holdings and NetEase.

After the approval was announced Monday, video game stocks in companies such as NetEase began recovering from Friday’s tumble. China’s state-run CCTV said the approval “strongly demonstrates the clear attitude of the competent authorities to actively support the development of online games,” adding that most game companies are deeply encouraged.

Chinese netizens, however, aren’t optimistic.

“Isn’t it the daily work of the NPPA to [approve games] on a regular basis? Don’t make it look like [you’re doing the industry a favor]” said a commenter named “OldTimeBlues” on YYSTV, a Chinese media platform for online gaming.

Another commenter, named Mizu, described the back-to-back announcements as a proverbial carrot and stick tactic.

“You noticed your kid is [has] a concussion after [you’ve hit] him with a stick,” they said of Friday’s announcement of new guidelines. “Now you are giving him a [treat] to make him feel better.”

Syu Jhen, founder of the policy think tank Hong Kong Zhi Ming Institute, said that the draft rules would affect not only the stock prices of Tencent and NetEase but the entire online gaming industry, even if China’s economy relies on domestic consumption.

Syu said that Beijing’s “one-size-fits-all” regulation of online gaming shows that China’s economic decision-makers do not respect market rules and often resort to moral kidnapping, allowing the social value that officials want to encourage to override principles of economic development and business operations.

A comment on YYSTV said, “Thinking issuing an approval would boost market confidence? It’s completely scratching the surface.”

Chen Chung-hsing, director of the New Economy Policy Research Center at National Dong Hwa University, said that at a time when China’s economy is weak and sluggish, exports and investment can no longer boost China’s economy. China can only rely heavily on domestic consumption. He said if China continues to suppress the domestic online gaming industry, it may have economic consequences and cause public resentment.

“China’s current unemployment rate is so high that some people may need video games to kill time,” he told VOA in a phone interview. In this case, [the rules] are also [a kind of] deprivation. Then, after these people stop playing video games, what will happen? Don’t they think about other ways to express their dissatisfaction? So basically, [playing video games] is also a possible source of power for [social] stability.”

Tseng Wei-feng, an assistant researcher at the Institute of International Relations at National Chengchi University, said the reason why the Chinese government wants to restrict online games is that the games often have a “group-fighting” model, which has become a virtual platform for young people to gather. He said the government worries that players can be united and mobilized in the virtual world.

“A group of people may attack a city in a certain game, then evolve into a so-called organized force,” he said. “If one day they are dissatisfied with China’s policies, will they all go to the government gate to protest? I think this is an aspect that the Chinese Communist Party has been strictly controlling.”

Some information is from The Associated Press. 
…