China Tells Tencent, Netease of Need for Tighter Games Oversight

(Bloomberg) — Chinese regulators summoned gaming companies including Tencent Holdings Ltd. and Netease Inc. to discuss further oversight of the industry, prompting a slide in share prices.

The Publicity Department of the Communist Party of China’s Central Committee, the National Press and Publication Administration and two other agencies called the meeting to convey plans to step up supervision and start checks on illegal behavior, according to the state-run Xinhua News Agency. The government just last week released new regulations for the industry, including limiting the amount of time children can play video games to just three hours a week.

The agencies told the companies they must enforce the new regulations and end their focus on profit to prevent minors from becoming addicted to games. They should also remove “obscene and violent content” and avoid “unhealthy tendencies, such as money-worship and effeminacy.”

“The authorities ordered the enterprises and platforms to tighten examination of the contents of their games,” Xinhua said. “The platforms must also resist unfair competition to prevent excessive market concentration or even monopolies in the industry.”

Chinese gaming stocks listed in the U.S. tumbled with Netease falling 5.2% and Bilibili Inc. 5.9%. The ADRs of Tencent, the country’s largest gaming company, dropped 3%. The Nasdaq Golden Dragon China Index slumped 3.3%.

Here are key points mentioned by Xinhua:

  • The gaming companies were asked to “profoundly understand the importance and urgency of preventing minors from online game addiction.” They were urged to implement rules aimed at “boosting youth development.”
  • The companies were asked to “fully and faithfully impose the time limit on underage gamers and banned from providing online game account trading services for minors.”
  • They were ordered to step up the examination of games’ content, including removing obscene and violent content and avoid “money-worship and effeminacy.”
  • The companies were asked to end “the solitary focus of pursuing profit or attracting fans and other erroneous tendencies, and change game rules and designs inducing addictions.”
  • They are supposed to restrict celebrity endorsements in game advertising.
  • The companies were asked “to place stricter management on the services of livestreaming games, including banning large rewards and rewards from minors.”


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