Shares of Tencent and NetEase dipped Friday morning as the State Administration of Press, Publication, Radio, Film and Television of China (SAPPRFT) rolled out regulations against online games Thursday night.
According to the government paper, the Administration will regulate and control the total number of online games and limit the number of new online game titles. The Administration will also work on a content rating system that carries age recommendations and limit the time the underage can play online games for.
Further regulation on games is likely to worsen the already gloomy license situation in the gaming industry. Earlier in August, Tencent said a freeze on game approvals from Chinese authorities has negatively affected its revenues and it did not know when the situation would be resolved. Gaming revenues are the biggest source of income for Tencent.
The regulation is part of China’s newest campaign to “control and prevent myopia of children and teenagers.” The campaign was jointly launched by eight state administrations including the Ministry of Education, General Administration of Sport of China, Ministry of Finance and SAPPRFT on Thursday after China’s president Xi Jinping expressed concerns over the rate of myopia in Chinese children and teenagers earlier. Before Xi’s concern, the World Health Organization’s report shows there were 600 million nearsighted people in China and the rate of myopia in Chinese youth topped the world.
Despite the common belief that close-up activities can cause myopia, new research shows that the true cause of near-sightedness is insufficient sunlight.
The Chinese authorities have considered online gaming negative for the youth and tried to limit the younger generation’s access to it. Tencent launched an anti-obsession system last July when the state media criticized the company’s popular game Honour of Kings having a negative influence on Chinese youth. The system limits the time for underage player to at most 2 hours a day.