China reportedly removes video game official after latest restriction proposals

Government seems to soften its stance after last year’s stock wipe-out

China’s National Press and Publication Administration (NPPA) had an unwelcome Christmas gift in store late last year when it proposed several video games restrictions to be adopted in 2024.

Designed to limit the amount of real currency players could spend inside games, the proposed rules also want developers to remove features such as daily login rewards that put pressure on people to play every day and may contribute to forming addictive behavior. Upon announcement of these proposals, the two biggest video game companies in China, Tencent and NetEase, lost double digits in stock value, which in turn sent other tech investors tumbling. Billions of dollars in market value were wiped out.

HoYoverse's games would likely not be impacted by the new rules too much anyways / HoYoverse

The market effect of these proposed restrictions was so negative that the government publicly softened its stance a few days later, vowing to seriously take into consideration the public’s opinion on the matter before making any decision about which rules to implement into law – these consultations run for a few more days until later in January.

According to Reuters, the NPPA’s latest move had severe consequences for its chief overseer, Feng Shixin. The news agency reported that the head of the publishing unit of the Communist Party's Publicity Department, which in turn steers the activity of the NPPA, has been removed from his position, though this has not officially been announced by the party yet.

Feng Shixin is a relatively prominent face in China’s campaign to combat video game addiction, which began in 2021 with massive limitations of allowed daily playtime as well as a pause in the game approval process. There is no indication that this policy will change overall, but it looks like last year’s tumbling of stock values gave the government a big enough scare to overthink some of the proposed measures.

It’s unclear if and how these proposals would impact the international versions of popular games such as Genshin Impact, Honkai: Star Rail, or Arknights, if they were adopted as written – though considering the conciliatory tone from the authorities, this seems to be more unlikely now. In any event, we’ll probably have to wait until the end of the consultation phase to hear more about what exactly will be implemented and what will be dropped, unless officials see the need to leak some more information to restore confidence in the markets.