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China approves 105 online games after releasing draft regulations for the industry.
Economy Technology

China approves 105 online games after releasing draft regulations for the industry.

The Chinese government has given the green light to 105 new online games this week, providing a boost to the industry shortly after proposing regulations that caused a drop in stock prices.

The NPPA declared on Monday, through WeChat, the approval of 105 games, stating that it is a demonstration of their endorsement for the growth and positive progress of the online gaming sector.

Just last Friday, those regulators revealed a variety of suggested regulations to prohibit online gaming companies from providing rewards for daily logins or purchases. Other suggested regulations involve restricting the amount users can recharge and giving warnings for “irrational consumption behavior.”

The preliminary regulations, released in order to gather feedback from the public on the suggestions, had a sudden and significant impact on the largest gaming market in the world. This resulted in a loss of up to $80 billion in market worth for China’s top two companies in the industry, Tencent Holdings and NetEase.

FILE - Youths look at their smartphones on the street in Beijing, Aug. 3, 2023.

FILE – Youths look at their smartphones on the street in Beijing, Aug. 3, 2023.

Following the announcement on Monday, companies like NetEase saw a rebound in their video game stocks after a decline on Friday. According to China’s state-run CCTV, the approval serves as a strong indication of the government’s support for the growth of online games, with many game companies feeling motivated by this news.

Chinese internet users, on the other hand, do not have a positive outlook.

“Doesn’t the NPPA have the responsibility of regularly approving games? Don’t try to make it seem like you’re doing the industry a favor,” commented “OldTimeBlues” on YYSTV, a Chinese media platform for online gaming.

Mizu, a fellow commenter, referred to the consecutive announcements as a symbolic use of rewards and punishment.

“According to Friday’s statement announcing new guidelines, it has been observed that your child has suffered a concussion after being struck with a stick. As a result, you are now providing them with a form of reward to help alleviate their discomfort.”

According to Syu Jhen, who founded the Hong Kong Zhi Ming Institute, the proposed regulations would have a widespread impact on not just Tencent and NetEase’s stock prices, but also the entire online gaming industry. This is true even though China’s economy heavily depends on domestic consumption.

According to Syu, China’s strict control over online gaming demonstrates a disregard for market principles by their economic leaders. This often results in using moral persuasion to promote certain social values, even at the expense of economic growth and business practices.

A statement was made on YYSTV that reads, “Do you believe that giving approval would increase market trust? This only barely addresses the issue.”

Chen Chung-hsing, the head of the New Economy Policy Research Center at National Dong Hwa University, stated that with China’s economy currently facing weakness and stagnation, the traditional methods of boosting the economy through exports and investments are no longer effective. As a result, China must rely heavily on domestic consumption to drive economic growth. However, he warned that suppressing the domestic online gaming industry could have negative economic consequences and stir public discontent.

During a phone conversation with VOA, it was mentioned that China’s unemployment rate is at a concerning level. As a result, some individuals may turn to video games as a means of passing time. However, this can also be seen as a form of deprivation. Once they are no longer playing these games, do they consider alternative ways to express their discontent? Ultimately, engaging in video games can also serve as a potential tool for maintaining social stability.

Tseng Wei-feng, an assistant researcher at National Chengchi University’s Institute of International Relations, explained that the Chinese government’s motivation for limiting online games is due to their tendency to feature a “group-fighting” format, which has become a popular virtual gathering space for young individuals. The government is concerned about the potential for players to form alliances and take action in the virtual realm.

“The speaker noted that players in a particular game may band together to launch an attack on a city and eventually transform into a coordinated group. If they become dissatisfied with China’s policies, will they gather at government buildings to protest? This is an area that the Chinese Communist Party closely monitors and controls.”

Certain details are sourced from The Associated Press.