The “Internet Game Management Measures (Draft for Soliciting Opinions)” released by the National Press and Publication Administration of China on the 22nd has caused a stir in the industry, proposing changes to the operation mode of game companies and potentially hindering the development of blockchain games in China.
(Table of Contents:
Restrictions on excessive gaming and reward mechanisms
Game currency and game items can only be used within the game
KYC and the use of real-name wallets required)
The “Internet Game Management Measures (Draft for Soliciting Opinions)” was released by the National Press and Publication Administration of China on the 22nd, and it is open for public input. Although it is currently in the draft stage, the announcement has already had a significant impact on the gaming industry. The stock prices of Chinese gaming giants Tencent and NetEase fell by over 12.3% and 24.6% respectively.
Behind this decline is the fact that the draft proposal has put forward requirements for changes to the operation mode of game companies, involving areas such as business models, monetization strategies, reward mechanisms, as well as data management and restrictions on games for minors.
For example, the draft proposal introduces measures to restrict excessive gaming and high-cost consumption. Article 18 of the “Measures” clearly stipulates that internet games shall not have inducement rewards such as daily login rewards, first-time recharge rewards, and additional rewards for consecutive recharges. At the same time, game publishers cannot promote the high-priced trading of virtual items through hype or auctions.
In addition, all internet games must set a limit on user deposits and clearly disclose it in their terms of service. Games should provide pop-up warnings for irrational consumption behavior.
For a long time, game developers have relied on daily login rewards, first-time recharge bonuses, and cumulative recharge incentives to maintain user activity and promote consumption. Therefore, these new regulations may have a significant impact on the profitability of game developers.
Regarding the issuance of in-game currency, Article 23 of the “Measures” states that games shall not allow users to exchange in-game currency for legal tender, unless game developers refund unused in-game currency upon termination of operation (detailed provisions in Article 36).
At the same time, the use of in-game currency should be limited to exchanging for products and services within the game and should not be used for payment or purchase of physical goods, or exchanged for products and services of other entities.
Furthermore, Article 26 clearly states that game publishers shall not allow the exchange of virtual items for legal tender. If users are allowed to exchange virtual items for physical goods, the content and value of these goods must comply with national laws and regulations.
Additionally, Article 22 of the “Measures” requires internet games to require users to provide true identity information when signing agreements or providing services, strictly implementing the real-name registration and login requirements to ensure the authenticity and validity of user identity information.
Similarly, in the use of digital RMB wallets, Article 24 stipulates that transactions must be conducted through real-name wallets and prohibits the use of anonymous digital RMB wallet transaction services.
These provisions of the “Measures” will have a significant impact on the development of blockchain games in China. Although the Ministry of Industry and Information Technology of China stated on the 19th that it attaches great importance to the development of the Web3.0 industry and encourages the exploration of new business models such as NFT, DApp, and DID, these new rules may restrict the business models of traditional gaming industry and further hinder the development of blockchain games in China.
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