China sets limits on gaming industry to prevent damage to children's eyesight

A boy plays video games. Photo: Biying

The Chinese government has suspended approvals of licenses for new video games since the end of March, in an apparent move to prevent damage to the eyesight of the country's teenagers.

According to a person familiar with the matter, the government may take a further four to six months to finalize the new licensing system. It is expected that relevant departments will tighten control over video games.

All video games, even those made available for free, are required to obtain a license to get published.

The gaming industry has witnessed a boom in China over the past few years due to a large number of users and popularity of smartphones.

However, parents and teachers are showing increasing concerns about the side effects of video games, such as violent content and harm to children's eyesight.

Chinese President Xi Jinping on August 28 called for greater attention to the issue, citing the World Health Organization data suggesting the country has the highest rate of childhood near-sightedness in the world.

In response, China's education ministry later released a statement on its website, unveiling a new plan to curb video game releases and playing time. Seven other ministries also endorsed the move.

The goal is to reduce the myopia rate in kids and teens by 0.5 percent overall per year by 2023, and by over 1 percent per year in provinces where near-sightedness is a bigger issue. By 2030, the ministry hopes to control the myopia rate at 3 percent for six-year-olds, 38 percent for all primary school students, under 60 percent for junior high students and below 70 percent for high school students.

The delays have contributed to the slowest first-half growth in at least a decade in the country's $38 billion games market. Tech giants like Shenzhen-based Tencent Holdings Limited and Beijing-based NetEase to hundreds of small firms are experiencing huge losses.

Tencent posted its first profit decline since 2005 on lower gaming revenue. Shares of Tencent, which runs the world's largest video games business, have fallen nearly 20 percent so far this year.

NetEase, the world's sixth-biggest listed games company and Tencent's closest rival in China, also posted lower-than-expected earnings in the second quarter.

"Failing to obtain approvals of licenses for new video games, we currently make profits from old video games, which players may find boring after a long playing time," said Song Qian, a member of staff with a Shanghai-based tech company.

Gao Baowen, an analyst with Shanghai-based Orient Securities, said that if the suspension in licensing continues, the industry will suffer a deeper slowdown.

"In half a year, everyone will run out of stock," he added.

However, firms affected by the changes have found that they can do little but wait for the dust to settle in Beijing, with no sign that the new regulatory system will be in place soon.

Video games also face the challenges brought by short video App Douyin, also known as Tik Tok overseas.

Douyin was launched by Chinese tech firm Beijing Bytedance, also the operator of the country's largest news aggregator Jinri Toutiao, in 2016

The company said on Weibo, China's Twitter-like social media platform, that Douyin had accumulated more than 300 million monthly active users in mainland China alone, which means that more people are spending less time on video games.

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