Gaming addiction under spotlight in China as regulators tighten control on industry

China’s top state media has warned against video game addiction, as regulators vowed to restrict the approval of new games amid concerns over children’s health.

“Indulging in online games is a huge hazard – the whole society should act to establish a protection net and wall for youngsters,” the official Xinhua News Agency said in a commentary published on Tuesday. “For the nation’s future, we can never allow gaming companies to hunt for wealth by inducing teens to get addicted [to games].”

The article came after authorities published a document last week outlining how China, under the direction of Chinese president Xi Jinping, would improve myopia among minors.

A section in that document said the State Administration of Press and Publications – a newly formed gaming regulator – will restrict the number of new online video games, limit the amount of time minors spend on games and establish an age-appropriate reminder system for games.

Game addiction will not only make minors neglect their studies, but also mislead them with wrong world views that could “bury hidden dangers in the society”, according to the Xinhua commentary. Citing a survey, it said rural kids are easily prone to being addicted to games partly because they lead simpler social lives.

China’s video games industry needed “strict control” even as it has become an important sector of the economy, People’s Daily, the Communist Party mouthpiece, said in a separate commentary published on Tuesday. “What we have to guard against is addiction, but not online games themselves,” it said.

Those commentaries in China followed the latest revision made by the World Health Organisation in its disease classification manual, which stated that compulsively playing video games qualifies as a mental health condition.

The UN agency said classifying so-called gaming disorder as a separate condition will help governments, families and health care workers be more vigilant and prepared to identify the risks, according to a Reuters report in June.

Rising concern over video games addiction looks to raise the stakes for some of the industry’s biggest companies operating in China, which is estimated by research firm Newzoo to be the world’s single largest gaming market in terms of size and revenue.

China’s gaming industry is suffering its slowest growth in a decade amid a months-long halt on government approval of new games.

In the first half of this year, the domestic video game sector’s gross revenue rose 5 per cent year on year to US$15 billion to mark the first single-digit growth since at least 2009, according to data from Beijing-based researcher CNG.

All video games, even those made available for free, will be required to obtain a licence to get published in China. The State Administration of Press and Publications – formed in March as part of a broader government shake-up that strengthens the Communist Party’s control over the industry – has not granted licences to any new games since March 28.

Amid that regulatory hiatus, Chinese internet giant Tencent Holdings posted its first profit decline since 2005 on lower gaming revenue. Shares of Tencent, which runs the world’s largest video games business, have fallen nearly 20 per cent so far this year.

NetEase, the world’s sixth biggest listed games company and Tencent’s closest rival in China, also posted lower-than-expected earnings in the second quarter.