China Restricts Video Game Usage, Shares in U.S. Fall

    • China is cutting the amount of time children can play video games to three hours most weeks.
    • Minors are allowed to play from 8 p.m. to 9 p.m. on Fridays, weekdays, and public holidays.

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China’s mobile gaming market was forecasted to reach $48 billion by 2027, despite a restriction of 1.5 hours allowed per day for minors — but that was before the country updated its online gaming plans Monday.

The world’s second-largest economy is cutting the amount of time children can play video games to three hours most weeks, with platforms only allowed to offer online gaming to minors from 8 p.m. to 9 p.m. on Fridays, weekends, and public holidays.

The announcement has already taken a toll on Chinese gaming stocks listed in the U.S. 

  • By market close on Monday, Tencent, which counts video games as a third of its revenue, dropped 1.03%, Bilibili Inc. dropped 1.59%, and NetEase Inc. dropped 3.39%.
  • According to state media, roughly 62.5% of Chinese minors play games online, and 13.2% of those gamers play for more than two hours a day on working days.
  • The ruling may not be as detrimental to the stocks long-term. Bloomberg Intelligence analyst Matthew Kanterman said, “Players under 16 accounted for 2.6% of Tencent’s domestic gross game spending in 2Q.”

China’s rules apply to any devices, including phones, and gaming companies are required to put real-name verification systems in place.

The news comes weeks after Beijing said it wants to make sports a $773 billion industry for China by 2025, with plans to increase the number of people participating in regular physical activity to 38.5% by 2025.