What’s new: Chinese gaming company NetEase Inc. said that less than 1% of its revenue comes from users under the age of 18, and that it is “in full support” of China’s new online gaming restrictions on minors.
The comment, made during the Nasdaq-listed firm’s second quarter earnings call on Tuesday, comes a day after the National Press and Publication Administration (NPPA) rolled out a rule (link in Chinese) that limits minors’ gaming time to Fridays, Saturdays and Sundays and public holidays from 8 p.m. to 9 p.m. in order to combat video game addiction.
In the second quarter, NetEase’s profit attributable to shareholders dropped 1 billion yuan ($154 million) from the comparable period a year earlier to 3.5 billion, even as revenue grew 12.9% to 20.5 billion.
The background: Chinese authorities signaled a regulatory tightening over the gaming industry earlier last month when a state newspaper published an article criticizing what it called the “spiritual opium” of gaming addiction, singling out Tencent’s market-leading title Honor of Kings.
On Monday, shares of Chinese gaming stocks dipped in the U.S. with NetEase falling 3.4%, Bilibili dropping 1.59%, and Tencent down 1.1%.
The NPPA, which approves and rejects video game titles, became China’s primary video game regulator when it was founded in March 2018 as part of a broader overhaul of the nation’s central government agencies. Responsibility was previously shared by the Ministry of Culture and the State Administration of Press, Publication, Radio, Film and Television, both of which were dissolved in the shake-up.
Read more China Hammers Mobile Gaming Industry With Tough New Limits
Contact reporter Kelsey Cheng (kelseycheng@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)
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