China seems to have scrapped planned gacha game regulations after backlash

Proposals are nowhere to be found anymore

It looks like Chinese authorities have scrapped plans to further tighten the regulations around video games with in-game purchases and gacha elements, which were originally proposed in December 2023 and immediately caused the share prices of gaming giants like Tencent and NetEase to plunge. Early in January 2024 the government fired the regulator responsible for proposing these rules, publicly signaling to the market that it would think things over.

The consultation phase, during which the public had the chance to comment on the proposals, ended on January 22, 2024, and it now appears as if the regulators were told to quietly retract their suggestions. The New York Times reported that the drafted rules have completely vanished from China’s National Press and Publication Administration’s website, which displays an error message instead. The agency did not issue an official notice of the proposals being canned, however, and an employee contacted by NYT could not explain the move either.

Genshin Impact may have had to change up a few things here and there under the new rules / HoYoverse

Clearly, those regulatory proposals must have never existed in the first place.

The drafted regulations were aimed at curbing excessive consumer spending on online games and those games’ use of addictive mechanics such as daily log-in rewards, hefty bonuses for first-time purchases with real currency, and so on. One of the proposed rules would have forced games with lootbox or gacha mechanics to provide players with an option to buy content directly instead of using the RNG-based avenue. Regulators also wanted studios to adopt “reasonable” rates for lootbox and gacha mechanics and implement a total daily spending limit per user.

Many of the biggest games in China use exactly those mechanics to generate revenue, though, which is why the ensuing market panic quickly wiped out billions of dollars in value. China faces a slowing economy at the moment, which makes the government sensitive about accusations of constricting economic growth through too much regulation – that sure sounds familiar, huh?

China’s gaming industry has endured several waves of crackdowns over the last couple of years and seemed to be making a comeback in 2023 with renewed growth. This recent affair may just have bought it another few months without any interference from the authorities.