China’s Ministry of Education believes the increase in gaming and internet use among minors could lead to higher rates of myopia, or nearsightedness, and it’s laid out plans to address the problem, according to market researcher Niko Partners.
The organization put out a notice on Thursday calling for limits to the number of new online games approved for distribution in the country. Over 8,500 were accepted in 2017, Niko said. Mobile games accounted for 8,202 of those approvals, while 37% were for poker and mahjong titles. Because of this, Niko thinks the Ministry of Education’s new regulations probably won’t impact PC and console games, or even core esports and mobile RPG titles.
“There are far fewer of such games in the market and in development, and the leading game companies will try to prioritize these money-making categories,” Niko said.
If the Ministry of Education does limit game licenses, smaller developers with only a few potential hits could suffer the most, Niko said.
“The top game companies would continue to strengthen their positions, as they have more AAA games and more resources to support the game-approval process,” it added. “The export game market is more competitive, so more middle and small companies could go under if their game is not approved for domestic distribution.”
But Niko also points out that there are currently thousands of games on the market, and fewer licenses could help smaller ones get noticed.
The Ministry of Education also said on Thursday that it wants to strengthen current regulations limiting the amount of time minors can play games online and investigate implementing an age-ratings system. China doesn’t have a ratings board like the Entertainment Software Rating Board in North America or Pan European Game Information in Europe. There is a color-based system, but it’s not enforced. Establishing an official ratings board would ensure minors have access to healthy content, according to the ministry.
If all of these recommendations are implemented, the Ministry of Education believes they can reduce myopia rates among children and adolescents nationwide by more than 5% each year through 2023.
The ministry’s recommendations are already having an impact on China’s largest gaming and social media company, Tencent. Its market value reportedly dropped by around $20 billion on Friday, according to Reuters. Shares fell by as much as 5.4%, closing at 4.9%. Tencent has reportedly lost more than $160 billion in market value due to regulatory concerns. It recently blamed a freeze on new game approvals for its first quarterly profit loss in nearly 13 years.