Jan 3, 2024 - World

China's gaming industry gets reported shakeup after turmoil over new rules

Young players compete in a battle match of the mobile game Arena of Valor, held in a shopping mall.

Young players compete in a battle match of the mobile game Arena of Valor, held in a shopping mall, on Oct. 1, 2017 in Tianjin, China. Zhang Peng/LightRocket via Getty Images

Beijing has reportedly removed a Chinese official involved in overseeing the country's gaming sector a week after proposed rules sent gaming stocks plummeting.

Why it matters: The turmoil demonstrates the difficult balancing act regulators in China face as they seek to reform key sectors without further damaging an already weak economy.

What's happening: Feng Shixin of the Chinese Communist Party's Publicity Department was removed from his position last week, sources told Reuters.

  • He had overseen the country's video games regulator, which had announced new rules last week capping online spending and banning the practice of rewarding gamers for logging in every day, among other restrictions.
  • Shares of online gaming giants like NetEast and Tencent fell dramatically, prompting regulators to offer "modifications and improvements" to the rules, per the Guardian.
  • The Chinese embassy did not immediately respond to a request for comment.

The big picture: China's gaming market, worth $45 billion and with 668 million players, is the largest in the world. For the past several years regulators have targeted the sector to try to curb online gaming addiction.

  • In 2019, regulators placed a daily limit of 90 minutes for gamers under the age of 18 and banned them from playing between the hours of 10 pm and 8 am. In 2021, minors were barred from gaming at all during weekdays and limited to one hour per day on weekends.
  • In 2021 and 2022, regulators went eight months without issuing any new game licenses, which coincided with a major crackdown on China's vibrant tech industry.

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