Why has Beijing been cracking down on China’s gaming industry?

China’s gaming sector has faced headwinds since 2021, when Beijing enacted limitations on the industry to tackle youth gaming addiction and filter out content it deemed inappropriate. One regulation passed in August 2021 placed a three-hour restriction on gaming time per week for children in China, delivering a big financial hit to the industry.


In 2022, China’s video game sales shrank for the first time in two decades, dropping 10%, due in part to new regulations and the economic slowdown. An 18-month licensing freeze on foreign games further choked the industry, with firms like Tencent, the world’s largest video game company by revenue, reporting its first ever drop in quarterly revenue last year.

What lies ahead for the Chinese gaming industry in 2023?

The Chinese gaming sector is expected to rebound this year. Liu Yaokun, a Chinese internet and media analyst at UBS, predicts 6% growth for the industry in 2023, according to a story from Dao Insights.


Meanwhile, the industry appears to be aligning itself Beijing’s agenda as it seeks to recover from the two-year clampdown. Earlier this month, a group of Chinese gaming and tech firms published a draft of “self-discipline rules” for the industry to follow to address issues of game distribution, counterfeiting, and addiction, among others.

The list of rules follows on from a pact over 200 industry members signed in September 2021 committing to follow the Communist Party’s regulations on content and address issues of gaming addiction.


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