An e-sports hotel gaming room in Baoji city in Northwest China's Shaanxi Province Photo: IC

China's new draft regulation for online games released on Friday has sparked intense discussion within the industry. The move demonstrates the country's ongoing efforts to regulate the gaming industry and promote its healthy devel-opment in accordance with the law, according to experts.

The National Press and Publication Administration (NPPA) on Friday released a draft regulation on the management of online games with a focus on setting restrictions on excessive use of and high spending on games. The draft rule is currently soliciting public opinion.

According to the draft regulation, online games should not offer inducement rewards such as daily login rewards, first-time recharge rewards, or continuous recharge rewards. The publishing and operating units of online games are not allowed to provide high-priced game props trading through hype or auctions. All online games must set a limit on user recharge amounts, and should provide pop-up warnings to remind users about irrational consumption behavior.

Among other things, it stressed that online games must not disclose national secrets, harm national security, or harm the nation's honor and interests. 

The draft measures also emphasize the protection of personal information and minors.  This includes setting caps on game spending of minors at different ages and prohibiting minors from giving tips during live-steaming online games.

The restriction on game spending has sparked discussion across the industry, with some worrying that it will weigh on the profits of gaming companies. 

Hong Kong-listed gaming stocks, including Tencent, nosedived following the release of the draft. Tencent shares slid 12.4 percent while NetEase shares plunged 24.6 percent as of Friday closing.

Zhang Wei, vice-president of Tencent Interactive Entertainment, said the new draft measure does not fundamentally change key elements such as the busi-ness model and operational pace of the gaming industry. 

"The regulatory authorities have released the new draft of the management measures to seek opinions from the industry, which is more conducive to the orderly and healthy development of the gaming industry," Zhang said.

The Chinese gaming industry has been quick to study and navigate the draft rule. 

"It will change the operation mode of each phase of game publishing and operation, such as game research, maintenance and promotion," a business insider in Guangzhou who works in the game publicity sector and preferred not to be identified told the Global Times on Friday.

Some argue that current drafts do not necessarily mean they will be implemented as is.

"It may be finalized after hearing industry feedback and making adjustments," a game developer surnamed Cheng, based in South China's Shenzhen, told the Global Times on Friday.

Since it is a draft for soliciting opinions, all sectors can express their views at this stage in order to make the draft rule practical and more refined, thepaper.cn reported, citing insiders from China Audio-video and Digital Publishing Association.

The new draft rule represents another step taken by China to regulate the gam-ing market, following proactive measures by regulatory authorities to address online gaming addiction among minors in 2021.

In recent years, various laws and regulations have been introduced in the gaming industry and other internet sectors that have been beneficial for the standardized and healthy development of these industries, Liu Dingding, a veteran internet industry observer, told the Global Times.

According to the 2023 China Game Industry Report issued on December 14, the actual sales revenue of the Chinese gaming market in 2023 reached 302.964 billion yuan ($42.51 billion), representing a year-on-year growth of 13.95 percent. This marks the first time the market has surpassed the 300 billion yuan mark.

In 2023, the number of Chinese gaming users reached a record 668 million, with a record year-on-year growth of 0.61 percent.