In recent years, the Chinese government has set several precedents for regulating abusive monetization schemes in certain video games. The measures were aggressivesince they tried to ban games with systems that could be considered “casino” and which are within the reach of children and even limited the number of hours of play for children, which has now expanded to games that seek to reward “addiction”. “.
According to ReutersChinese regulators have announced a series of measures to control video games whose monetization system consists of rewards for daily participation or with internal transactions. Of course, this directly affects mobile games, the system of which is to develop free games with daily rewards and many micro-transactions. But this is not only a measure that affects China, but has also had a collateral effect on the stocks of companies such as Tencent and NetEase.
A blow to mobile games with common monetization practices
And yes, this type of video game was already something we normalized for free cell phone games, games that we are used to participating in every day to receive rewards. This practice has been banned in China. Additionally, the amount of money that can be invested in video games will be limited, as it is considered an addiction hazard for the community.
This measure significantly affected two of the largest mobile game publishers. Investors in Tencent and NetEase were hit by fears of losing a bargain, causing them to wipe out nearly $80 billion in market value.
Removing these incentives is likely to reduce daily active users and app revenue, and could potentially force publishers to fundamentally rethink their game design and monetization strategies,” said Ivan, a Morningstar analyst.
