Chinese video gaming firm in rare protest over refunding rules proposed by state-backed association
A Chinese video gaming company has threatened to quit a state-backed association over controversial refunding rules, in a rare open protest revealing tensions between regulators and private business in the domestic industry.
Guangzhou-based Duoyi Games issued a public statement on Tuesday challenging a new draft of rules released by the Internet Society of China, a semi-official agency that translates Beijing's intentions into "self-discipline" guidelines for the industry to follow.
Douyi, which threatened to quit the association, was protesting against a draft rule that said China's video gaming companies must refund "excessive payments" made by minor players. Specifically, refunds of 100 per cent were proposed for minor players if the company did not conduct an "anti-addiction" review of the player in advance, while companies would have to refund "30 to 70 per cent" of the payment even in cases where an adult helped a minor deliberately skirt the anti-addiction settings.
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The draft rules, which force video gaming companies to shoulder the blame and could create a huge loophole for abuse, are open for feedback until June 27, after which the rules are expected to come into effect. The Internet Society of China did not respond to a request for comment on Wednesday.
A screenshot from Gunfire Reborn Mobile, a video game from Duoyi Games. Photo: Handout alt=A screenshot from Gunfire Reborn Mobile, a video game from Duoyi Games. Photo: Handout>
The proposed rules are designed to prevent teenagers from becoming addicted to video games. The country has implemented one of the world's strictest regulations capping game-playing time for those under 18 to three hours per week, and only on Fridays, Saturdays and Sundays.
The Chinese government has put the onus on video gaming companies to design user verification systems to ensure the restrictions are not easily skirted. However, it is not uncommon for teenagers to ask for help from their guardians to skirt the restrictions.
Ding Daoshi, an influential independent internet commentator, said the new draft could be abused. "Some parents may recharge and consume [games] on their own, but let their children take the blame in order to obtain the platform's refund," Ding said in a WeChat post published on Tuesday. "The blame cannot be placed entirely on gaming companies," he added.
It marks the latest regulatory hiccup in the industry following a market rout in December 2023 when the National Press and Publication Administration, the agency that answers directly to the propaganda authority in overseeing the country's video gaming industry, issued a draft rule to curb spending on video games. That was revoked and a key official involved in drafting the rules stepped down after it caused a massive sell-off in Chinese video gaming stocks in New York and Hong Kong.
A promotional image for Gunfire Reborn Mobile from Duoyi Games. Photo: Handout alt=A promotional image for Gunfire Reborn Mobile from Duoyi Games. Photo: Handout>
Duoyi Games, a Guangzhou-based game studio founded in 2006, operates a number of well-developed game franchises including Dream World and Gunfire Reborn. The Internet Society of China, which was founded in 2001 by about 70 companies, now has over 1,600 members including big names such as Tencent Holdings and Huawei Technologies.
China, the world's second-largest video gaming market by revenue, is also one of the most stringent in the world when it comes to tackling gaming addiction among minors. The government is keen to keep Chinese teenagers away from screens, with some state official media labelling gaming as "spiritual opium". Nonetheless, the domestic market's revenue grew 14 per cent to 303 billion yuan (US$41.8 billion) in 2023.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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