I was not expecting "China (possibly) curbstomping gacha gaming" as end of the year news, but you know what, let's roll with it
Online games will now be banned from giving players rewards if they log in every day, if they spend on the game for the first time or if they spend several times on the game consecutively. All are common incentive mechanisms in online games.
Shares in Tencent Holdings (0700.HK), the world's biggest gaming company, tumbled as much as 16% at one point, while those of its closest rival, NetEase (9999.HK), plunged as much as 25% after the National Press and Publication Administrations published the new draft rules.
Shares of tech investor Prosus (PRX.AS) followed Tencent lower, losing 14.2% in early trade on Friday and were among the biggest fallers on the pan-European stock index (.STOXX). Prosus owns a 26% stake in Tencent.
"The removal of these incentives is likely to reduce daily active users and in-app revenue, and could eventually force publishers to fundamentally overhaul their game design and monetisation strategies," said Ivan Su, an analyst at Morningstar.
Games are also banned from offering probability-based lucky draw features to minors, and from enabling the speculation and auction of virtual gaming items.
