China’s Ministry of Culture currently has a hold on new game releases, forcing publishers like Tencent and Perfect World to lose double-digit percentages on the Chinese stock exchange. According to the Daily Mail, Perfect World’s stock dropped as much as 9% following the news, while Tencent dropped 5% on the Hong Kong exchange.
The new regulations haven’t actually gone into practice yet, but in the interim the government has put a restriction on new games being released into mainland China until they can figure out a reasonable way to limit the amount of time that youth spend on their daily gaming habits, and to further regulate what sort of content is allowed in games. This is in response to a study that stated that too much time spent in front of electronic display screens is causing a sharp rise in near-sighted kids and myopia.
This isn’t a new development for China, though. The country has been battling against video games for years, alongside South Korea.
Both countries institute militarized camps for treating video game addiction, and both classify video games as a bane on their cultural society. Various South Korean gamers have been complaining about the rules and regulations for years, which prompted some companies to relocate their businesses from South Korea to China.
Ironically enough, moving from South Korea to China may not be a viable long term strategy if China is cracking down on new game releases.
In fact, according to the article, China has not approved a new game release since May of 2018. Companies like Tencent have been unable to release new games like Monster Hunter World in mainland China.
It’s even worse for the long term effects for companies like Tencent since they recently acquired stakes in multiple Western studios, including LEGO.
China is currently the world leader when it comes to video game revenue, so this drastic regulatory decision could impact the billions of dollars that the region generates in software purchases.
(Thanks for the news tip Flying Bat)
Ads (learn more about our advertising policies here)