New rules from China to slash kid’s gaming time to three hours a week

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In a move to control the expansion of large tech companies, China is set to limit the amount of time children can play video games to three hours most weeks, Business Standard reported on Tuesday. The restriction will be a huge blow to the world’s largest mobile gaming market. The rule, said to be the strictest so far, will wipe out spending from minors, which was extremely low, the report noted quoting an analyst.

As per the report, with the new rule coming into effect, popular gaming platforms like Tencent Holdings Ltd and NetEase Inc can only offer online gaming to owners on Fridays, weekends and public holidays from 8:00 PM to 9:00 PM. The new framework is a major step up from the 2019 restriction of 1.5 daily hours most days, owing to myopia among children.

Other key points in the new rules include, regulators increasing the checks over how gaming firms carry out restrictions on things like playing time and in-game purchases, regulators to work with parents, schools and other members of the society to combat youth gaming addiction and a state ant-addiction system that would link all online games, so that companies can’t provide services to users without real-name registrations.

The publication further said that a top-level committee led by President Xi Jinping has made efforts to prevent the disorderly expansion of some platform companies was a success, owing to more transparency and predictability in setting policies. Beijing’s efforts in reining large tech companies will continue, it added.

New restrictions may impact margins in short term

The new rules indicate the extent to which Beijing is intent on curbing gaming addiction among youths and pushing its future workforce towards more productive pursuits. Earlier, state media published mobile games as a spiritual opium. Though it was later removed, share prices plunged out of concern for further restrictions.

According to analysts Tencent, NetEase and other online gaming companies in China may have a modest hit to their financial performances from tightening of time restrictions placed on minors playing games to three hours per week, as they only account for less than 3% of its gross gaming receipts. However, margins could suffer a pinch in the near term to accelerate the roll out of compliance measures.

Shares of Porsus NV, Tencent’s biggest shareholders in Europe fell on Monday. NetEase’s shares slid by as much as 9.3% in pre-market trading in New York.