China (Washington Insider Magazine) -The Chinese government’s recent run of taking moves that wipe billions off some its biggest markets has continued with the introduction of a new round of laws designed to limit the amount of time children spent gaming.
The recent ban of profits for private tutoring companies sent shockwaves through an industry that was worth $120 billion at the beginning of August. A sweep of measures designed to curb the power and social costs of large corporations falls in line with the Communist Party of China’s announced plan to move China to its second stage of growth, intended to be more equitable than the period began by Deng Xiaoping in the 1980s. Both domestic and international companies have had huge falls in stock price over the last week as President Xi Jinping promised to curb “excessively high incomes”. One week in August saw the ten most valuable Chinese companies that trade in America lost $153 billion in market value – over 15% of their combined worth.
The global gaming industry is worth over $160 billion. It is larger than Hollywood and growing much faster. $40 billion of that comes from China, the world’s largest gaming market.
The world over, people express concern at the effect this relatively new form of media has on people, especially children. It often receives part of the blame for rising rates of ADHD and social anxiety in youth, as well as increasingly sedentary lifestyles.
The gaming market in most parts of the world benefits from a laissez-faire approach, with there being little proof as so far of its direct negative effects as well as making up a substantial part of most developed and developing economies.
China has taken a more proactive approach, however. In 2019 children in China were restricted to 1.5 hours of gaming a day and three hours during holidays. Leading companies such as Tencent annoyed their intention to help curb unhealthy behavior such as children spending money on games.
The new laws restrict this time even further, limiting gaming for children to just three hours a week between 8-9pm on Fridays, Saturdays, Sundays and public holidays.
In the short term the move isn’t expected to impact the big players hugely, with the majority of their revenue coming from those in the 19-35 bracket. However, it is expected the move will choke the funnel from which young gamers pick up a habit that they normally stick with for life. An analyst at Lightstream Research Mio Kato said that “If you pick up a sport at 10 or 12 then you are more likely to keep playing it during your life”.
The enforceability of such rules is likely to require a solution that develops with the technology. VPN’s already in widespread use throughout China, could provide one way out. If gaming companies in China wish to save themselves from the fate other industries are falling to, it may have to rely on the children and technology staying one step ahead of the CPC.
