China, the world’s largest video game market, has reportedly frozen approvals of new game licenses, raising market concerns over a broader crackdown on the nation’s booming gaming industry.
The Ministry of Education on Thursday unveiled a plan to limit the number of new online games in response to rampant gaming addiction among Chinese youth.
The publishing regulator should control the number of online video games and take measures to limit the amount of time young people spend playing games, The ministry said in a document published on Thursday.
The document outlines how China would respond to worsening rates of myopia, or near-sightedness, among young people, Reuters reported.
The General Administration of Press and Publications will “implement controls on the total number of online video games, control the number of new video games operated online, explore an age-appropriate reminder system in line with China’s national conditions, and take measures to limit the amount of time minors” play games, the document said.
The ministry also called on parents to limit the amount of time their children spend using smartphones and other mobile devices. “The use of electronic products for non-learning purposes should not exceed 15 minutes and should not be more than one hour per day,” it said.
Social media giant Tencent Holdings (00700.HK), the world’s top-grossing games publisher, dropped as much as 5 percent in pre-market trade. As of Friday noon, its shares were trading at HK$341.2, down 4.5 percent from the previous close. NetEase Inc., its closest competitor, fell 7.2 percent in New York.
The government has frozen approvals of game licenses during a restructuring of department responsibilities, without providing a specific reason for the suspension, Bloomberg News reported this month.
In addition, there is no official indication as to when the suspension will be lifted and whether the rules for publishing may once again change.
Earlier this month, Tencent posted its first quarterly profit decline in nearly 13 years, after it failed to get approval to monetize its most popular game, PlayerUnknown’s Battlegrounds, which sparked the “battle royale” gaming craze. It said it did not know when the freeze would be lifted.
The company has been fiercely criticized by state media for its popular game Honour of Kings, which is being blamed for Chinese youngsters’ addiction to mobile phone games.
Despite the gloomy regulatory atmosphere in the gaming industry, Tencent has announced a partnership with Square Enix, a Japanese maker of popular video game titles such as Final Fantasy and Tomb Raider.
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