Three days of ups and downs in the gaming world! According to news on December 25, the State Press and Publication Administration today announced the version numbers of domestic online games in December, and 105 new games were awarded. Tencent's "Reverse War: The Future" and NetEase's "Firefly Strike" are on the list. Just three days ago, on December 22, the lunar winter solstice, some people said that day was the "coldest" day for domestic games. A piece of "Online Game Management Measures (Draft for Comments)" (hereinafter referred to as the "Draft for Comments") single-handedly caused all game-related stocks in A-shares and Hong Kong stocks to plummet instantly.
The "Draft for Comments" states that online games are not allowed to set inductive rewards such as daily login, first-time recharge, and continuous recharge. Online game publishing units shall not provide or condone high-priced transactions in virtual props in the form of speculation, auctions, etc. All online games must set user recharge limits and announce them in their service rules. Pop-up warnings should be issued to users for irrational consumption behavior.
▲Picture: The "Draft for Comments" proposes many regulations that subvert the common rules of the industry and shock game practitioners
In addition, the "Draft for Comments" also prohibits forced battles, and online game publishing and operating units are not allowed to set up forced battles in online games. Moreover, the "Draft for Comments" has also begun to cover popular mini-games. "The management of domestic mini-program online games that have no storyline, simple gameplay, and no recharge consumption shall be separately stipulated by the national publishing authorities in accordance with the principles of the "Publication Management Regulations" and these Measures."
After the "Draft for Comments" was released, it directly caused the stock prices of Hong Kong stocks and A-share listed game companies to plummet collectively, and further triggered the overall plummet of Hong Kong stocks and A-shares that day.
Among them, Tencent's stock price closed at HK$274, down HK$38.6 or 12.35% from the previous day, and its market value evaporated by HK$362.1 billion. NetEase's stock price suffered a heavy setback, falling as much as 28.24% midway. The stock price closed at HK$122, down by HK$39.8 or 24.6% from the previous day, and its market value evaporated by HK$131.2 billion.
Tencent and NetEase alone lost market value of up to HK$493.3 billion, which is extremely rare in the history of Tencent and NetEase being listed for more than 20 years. In this regard, some netizens vividly summarized: Tencent lost one JD.com, while NetEase lost four Bilibili. Some netizens calculated that each word of the "Draft for Comments" is worth about 40 million yuan based on the 11,259 words in the entire text.
Other game companies such as Century Huatong, Sanqi Interactive Entertainment, Perfect World, Kunlun Wanwei, Gigabyte, Youzu Networks, Zhangqu Technology, Yaoji Technology, Xindong Network, China Mobile Games, and Zulong Entertainment have also seen their stock prices fall, and many have fallen by more than 10%. In addition, Bilibili, Kuaishou, Meituan, and Alibaba have all followed suit.
The plummeting of game stocks has put the domestic game industry facing a huge crisis of "total collapse". December 22 can indeed be called the "coldest" day.
For a time, there was an endless debate on the Internet about the "Draft for Comments". With investors and gamers anxiously waiting for the latest explanation from the competent authorities, reporters from The Paper asked insiders of the Game Working Committee of the China Music and Digital Association for confirmation that day. The other party said that since it is a draft for comments, it means that at this stage, all walks of life can speak freely to make it practical and more complete.
On December 23, "China Press, Publication, Radio and Television" released the latest dynamic news "Relevant person in charge of the National Press and Publication Administration: <Online Game Management Measures> (Draft for Comments) aims to promote the prosperity and healthy development of the industry" through the WeChat public account. The report read:
The relevant person in charge of the National Press and Publication Administration stated that the draft for comments is based on ensuring and promoting the prosperity and healthy development of the online game industry. It has established a special chapter on "Guarantees and Rewards" and proposed a series of incentive measures to solve issues such as the access of online game business units. At the same time, provisions are made to protect the rights and interests of minors and consumers. During the drafting process of the draft, opinions from relevant departments, industry associations, enterprises and other parties were widely listened to through various methods. The person in charge said that the public solicitation of opinions on departmental regulations is a process to listen to more opinions and improve the regulations and provisions.
The State Press and Publication Administration will carefully study the concerns and opinions raised by all parties on Articles 17, 18 and other contents of the draft, and will further revise and improve it on the basis of continuing to listen to the opinions of relevant departments, enterprises, users and other parties.
▲Picture: Articles 17 and 18 mentioned by the relevant person in charge of the National Press and Publication Administration
Among them, Articles 17 and 18 mentioned by the relevant person in charge of the National Press and Publication Administration are: prohibiting forced battles and restricting excessive use of games and high consumption.
The former is a fatal blow to some strong PK games, such as chicken games, MOBA games, national war games and SLG games, because the core of the gameplay of such games is to PK with others. The latter prohibits the setting of daily login, first-day recharge, continuous recharge, prohibits auctions, and limits the recharge amount. Each of these is enough to subvert the existing online game design concept, especially the restriction of the recharge amount, which will definitely have a significant impact on the game's operating income.
Although the relevant person in charge of the National Press and Publication Administration later emphasized that the purpose of the new online game regulations is to promote the prosperity and healthy development of the industry, it still cannot eliminate the doubts of game practitioners and investors. Fortunately, the person in charge of the version office has said that "further modifications and improvements will be made" to appease everyone's mood. However, whether there will be an "Article 18" in the end, or how to modify this article, is crucial to the game industry.
The current time for collecting opinions on the "Draft for Comments" is until January 22, 2024. Both game industry practitioners, investors and netizens still have time to put forward their views and opinions to the competent authorities. As long as everyone speeds up their feedback, the final version of the "Online Game Management Measures" will definitely usher in reasonable changes.
Who is hurt the most
Judging from the intensity of game review in recent years, the current version review process is a very mature, complete, and professional process, which can at least confirm that the reviewers are experienced in playing games.
At a meeting in September 2021, a review expert from the General Administration made a report called "Key Points and Analysis of Game Publication Content Review" to game practitioners. The expert specifically pointed out that some game companies have a misunderstanding - thinking that the reviewers do not understand games.
▲Picture: In September 2021, a review expert from the General Administration made a report titled "Key Points and Analysis of the Content Review of Game Publications" for game practitioners.
For example, judging from the content of this "Draft for Comments", the person who drafted this "Draft for Comments" has a very professional understanding of the game industry and products. Some netizens commented that this time the new online game regulations are almost all based on the seven inches of the game company, and the framers are simply better than him, a veteran gamer of more than ten years. People also need to know more about games. Some netizens commented that some of the rules in the "Draft" were tailor-made for NetEase's games, especially "Fantasy Westward Journey", which "cut" in Ding Lei's heart. This is also the reason why NetEase's stock price fell the most after the "Draft" was released.
Gamers generally believe that NetEase's games are more "money-earning" than Tencent's games. There is a popular joke among gamers that Tencent's krypton-gold concept is to allow 10,000 people to recharge six yuan each, while NetEase's krypton-gold concept is to allow six people to recharge 10,000 yuan each. Therefore, Tencent's games can be played without krypton gold, while NetEase's games without krypton gold can only be reduced to cannon fodder.
This view has a certain basis in reality. For example, before NetEase adopted the large DAU route and achieved success in "Danzi Party" and "Nishuihan Mobile Game" this year, NetEase's products, especially MMORPG, are famous for their heavy use of krypton money. Many games mainly rely on Local tyrants maintain servers, while Tencent games such as "Honor of Kings" mainly have a large player base and do not rely on the excessive consumption of some players. Therefore, they limit user recharges, card draws, PK environments, and item transactions. Almost every new online game regulation is pierced into NetEase's main artery.
According to Leidi.com, an industry insider said that NetEase's game "Fantasy Westward Journey" involves gambling on equipment, spiritual ornaments, demon refining, and limited-edition cotton clothes every day. The game's trading platform, Treasure Pavilion, generates hundreds of millions of yuan every day, and NetEase's commission is tens of millions a day. A piece of game equipment is worth millions of yuan, and an account is tens of millions. Therefore, the recharge limit has a much greater impact on NetEase.
The above-mentioned person said that NetEase’s flagship online game “Fantasy Westward Journey” treasure house is what the regulator calls “a platform that condones high-priced trading of virtual items.” The current vitality of “Fantasy Westward Journey” is not because of how fun the game is, but because the game’s economic system is more stable than the real world, with a bunch of local tycoons supporting a studio and entertaining players.
▲Picture: The transaction price in NetEase Treasure Pavilion is often in the tens of thousands, which is also a luxury-level price in the real world.
In addition, compared with Tencent's game business accounting for about 30% of Tencent's revenue, NetEase's game business accounts for a much higher proportion. According to NetEase's third quarter financial report for 2023, net income in the third quarter was 27.3 billion yuan. Among NetEase's main businesses, net income from the game segment in the third quarter was 21.8 billion yuan, a year-on-year increase of 16.5%, accounting for nearly 80% of net income in the third quarter. Therefore, NetEase has naturally become the worst loser among gaming stocks, directly erasing all the gains in the past year and slipping from the fourth position to the fifth place in the market capitalization of Chinese Internet technology companies, which it just surpassed Meituan a few days ago.
▲Picture: NetEase’s stock price plummeted, and its market value was surpassed by Meituan and fell to the fifth place among Chinese Internet technology companies.
Since NetEase was the most affected, Oriental.com's financial reporter rushed to ask the customer service of NetEase's "Danzi Party" that day. Regarding the "Draft for Comments", the other party said, "It is currently in a stage of soliciting opinions, and it is not a final version that will take effect, so it has not been officially implemented yet." The first deposit shall be based on the prompts given by the system.
However, game customer service cannot represent the official government after all. Therefore, a reporter from the Science and Technology Innovation Board Daily asked NetEase for its views on soliciting opinions on new online game regulations. NetEase stated that in the past few years, under the guidance of industry authorities, the game industry has maintained a good momentum of development and has also made great progress in key areas such as the protection of minors.
NetEase believes that the issuance of this consultation draft is mainly to make up for the lack of relevant management measures after 2019 and will not have a substantial impact on NetEase's business. NetEase Games has always strictly implemented various rules, regulations and requirements such as anti-addiction for minors. NetEase will actively participate in feedback on newly released drafts for comments. It is believed that the introduction of new regulations will be more conducive to the protection of consumer rights and interests, and will be conducive to the continuous progress of game companies, thereby promoting the sustained high-quality, healthy and orderly development of the entire game industry.
Although NetEase's stance is positive, for example, NetEase has made great progress in protecting minors, which is conducive to the protection of consumer rights and interests and the progress of game companies, the flash crash of its stock price has told the outside world that the capital market definitely does not recognize NetEase's claim that "it will not have a substantial impact on NetEase's business."
However, as the customer service of "Danzi Party" said, "It is currently in a stage of soliciting opinions, and it is not a final version, so it has not yet been officially implemented." Therefore, what NetEase needs to promote most is to actively participate in the suggestions and feedback of the "Draft for Comments", fully improve future new game regulations, and effectively protect the balance of interests between enterprises and consumers.
In addition to NetEase, many listed game companies have also responded to the impact of the above-mentioned "Draft for Comments" on the industry and companies.
▲Picture: Ma Huateng publicly affirmed the "Draft of Opinions"
According to the "China Fund News" report, Tencent Games Vice President Zhang Wei responded to reporters' inquiries about the "Draft for Comments" and said: "Since the release of the new unguaranteed regulations in 2021, Tencent has been strictly implementing management requirements, and the current gaming time and consumption data of minors are at historically low levels.
Perfect World also responded that it will actively participate in the process of soliciting opinions and put forward specific and feasible suggestions based on the current development needs of the industry and its own actual situation.
Xindong Company also stated that it will actively cooperate with the implementation of the new regulations.
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Shengtian Network stated that overseas game revenue accounts for close to 70% of the company's game segment, and the implementation of the new regulations is expected to have a limited impact on the overall business.
If the above game companies are still in a state of verbal response, then some game companies are already modifying the game in accordance with the "Draft for Comments". On the same day that the "Draft for Comments" was released, a domestic game company officially announced that a new game will be launched soon. However, because some of the game's mechanisms are inconsistent with the "Measures", the company is working overtime to modify the "daily check-in" and other in-game settings that are inconsistent with the content of the "Measures." Judging from the recent new product information in the game industry, the company is Fold Paper Network, and the modified product is the 3D love interactive mobile game "Love and Deep Space".
▲Picture: Diezhi Network is working overtime to modify the "daily check-in" and some other in-game settings of the 3D love interactive mobile game "Love and Deep Space"
It can be seen from this that all game companies have a positive attitude towards the release of the "Draft for Comments" by the Board of Directors and are willing to cooperate in its implementation.
The dual nature of the game
Ninth Art and Electronic Heroin
Since its birth, video games have always had two completely different labels - one is positive, saying that it is the ninth art after the traditional eight arts, painting, sculpture, architecture, music, poetry/literature, dance, drama, and film; the other is negative, saying that it is electronic heroin or even a scourge.
The argument that games are electronic heroin was proposed more than 20 years ago, starting from the era of game consoles and arcades, and continuing to today's PC games, client games, web games and mobile games. Those who hold this concept will think that games make people decadent, play with things and lose their morale, and may even lead to human tragedies such as family destruction and death.
Although more than 20 years have passed, this view is still used to criticize the game industry from time to time. In this regard, Huang Yimeng, chairman of Xindong Network, once posted on Zhihu that the term "spiritual opium" is not only extremely harmful, but also extremely insulting.
▲Picture: Huang Yimeng, chairman of Xindong Network, once posted on Zhihu
Looking at it now, this statement is a bit exaggerated. At present, most adults' concept of games is mostly a cheap entertainment activity, and consumption is within a reasonable range that they can accept.
According to the "2023 China Game Industry Report", the output value of China's game industry exceeded 300 billion for the first time this year, the number of users reached 668 million, and the per capita annual game consumption was only 400+ yuan.
As for anti-addiction, thanks to years of work by game companies in cooperation with regulatory authorities, this problem has been basically solved. What is currently more troublesome is that minors use various means (such as using adult ID cards, etc.) to bypass the anti-addiction regulatory system. But the solution should be to start from the source, such as educating minors about addiction, and asking parents and schools to work together to implement supervision measures.
At present, whether Tencent, NetEase or other companies, when responding to the "Draft for Comments", most of them stated that they have made fruitful progress in the protection of minors. For example, take Tencent's "Yuanmeng Star" which was launched on December 15 as an example:
In order to restrict minors from overindulging in online games, Tencent has taken strict measures in the game "Yuanmeng Star". First of all, the game has strict requirements for real-name registration to ensure the authenticity and validity of the player's identity. Secondly, the game also sets strict restrictions on recharge behavior, clearly stipulating that minor users under the age of 12 cannot perform recharge operations. Finally, the game also canceled multiple channel servers to reduce the chances of minors obtaining game accounts.
Therefore, the idea that games are electronic heroin and scourges is simply untenable in today’s regulatory environment.
▲Picture: A station B UP owner introduces in detail the most stringent anti-addiction system enabled by "Yuanmeng Star"
On the contrary, games are also an important platform for spreading Chinese culture. For example, MiHoYo's "Genshin Impact" has repeatedly integrated world cultural heritage sites such as Guilin, Zhangjiajie and Huanglong Scenic Area in China into the game. Not only has it been named and commended by the official media many times, it has even been recommended by the Chinese Embassy in Italy, the Chinese Consulate General in Osaka, Japan, and the Chinese Embassy in Brazil.
Another domestic 3A-level stand-alone masterpiece "Black Myth: Wukong" that has aroused heated discussions around the world before it was launched. Since most of its shooting locations are in Shanxi, the official account of Shanxi's Department of Culture and Tourism released a promotional video of ancient buildings in Shanxi, showing a comparison of the scenes of the "Black Myth: Wukong" game and the actual shooting locations of ancient temples and pagodas, which fully reflects the many cultural treasures of Shanxi, my country.
According to a report by game industry media GameLook, at the first Online Publishing Development Forum held by the State Press and Publication Administration in June this year, several leaders from the Central Propaganda Department gave keynote speeches.
In the speech, the Propaganda Department of the Central Committee of the Communist Party of China praised the positive value of many games. The speech mentioned the "team spirit and cooperation concept" advocated by "League of Legends" and "Glory of Kings", the praise of heroic justice in "Counter-Strike" and "Peace Elite", the exploration spirit and innovative consciousness of "Genshin Impact" and "Robulus", etc.
In addition, the speech also mentioned that international manufacturers such as Ubisoft and Nintendo are showing their talents in China, and some overseas masterpieces have been introduced to China and have been welcomed by domestic users. Many games such as "PlayerUnknown's Battlegrounds", "Knives Out" and "Sword and Expedition" are well received by users at home and abroad.
The Propaganda Department of the Central Committee of the Communist Party of China pointed out in its speech that online publishing is an important carrier for cultural exchanges and cultural dissemination. It naturally has the ability to cross national borders and has increasingly become one of the most popular and high-profile emerging industries in the world. It has become a representative industry for the integrated development of science and technology and culture.
How to view games dialectically
It is worth noting that although most of the regulations in the "Draft for Comments" regulate games, it also states that high-quality games and original games will be encouraged and rewarded, and games will be encouraged to go overseas and explore overseas markets.
This reflects that our country's game industry, especially in the field of mobile games, is at the world's leading level. Billions of foreigners around the world have downloaded our country's overseas games. This not only promotes our country's traditional culture, but also creates a large number of high-paying job opportunities.
And if we focus on the global game industry and sort out the historical context from its birth to the present, we can conclude that games are not only a catalyst for changes in electronic technology, but also a propellant for technological development.
According to the article "Chip Wars in Games" written by the self-media "Boss Fantongdai", the development of electronic games and computers is actually at the same time, and even many major computer technologies were born in games.
In the 1960s, Ken Thompson of Bell Labs wrote a small game called "Space Travel" on the mainframe of his work unit. Later, the project was canceled and the computer was taken back. In order to continue playing, he transplanted the game to an old minicomputer and wrote an operating system for this - Unix.
Unix is the source of all things. It has derived or influenced almost all non-Microsoft operating systems such as Linux, MacOS, iOS and Android, and forms the basis of most intelligent systems around us. Thompson's colleague Dennis Ritchie was also addicted to "Star Trek" and created the C language while helping to develop Unix.
In other words, Unix and C, the two pillars of computer science, were born from two people who wanted to play games after work.
Not long after computers were invented in the 1960s, scientists urgently needed a program to measure computer performance. In 1962, MIT scholars developed a game called "Space War" in order to "squeeze out" computer performance. Although the gameplay is rough and the graphics are simple, it is still popular in several local universities.
So students rushed to the computer room to "test the performance of the computer," just like how college students used CS and Warcraft to "test" the performance of the school computer room many years later. A man named Nolan Bushnell discovered business opportunities. A few years later, he founded Atari and developed a game console called "PONG".
This is the story that happened more than half a century ago, about the birth of video games, the emergence of the earliest game consoles, and the establishment of the earliest game companies.
Today, a technology company that plays an indispensable role in the gaming industry is called NVIDIA. Gamers' endless demand for gaming hardware has become a rocket under Nvidia's crotch, and gamers have brought huge profits and a steady stream of research and development expenses to Nvidia.
Technologies such as dynamic high resolution, dynamic overclocking, ray tracing, and DLSS driven by game graphics cards have also become key technical areas of NVIDIA GPUs and have begun to be widely used in architectural visualization, autonomous driving, medical care, life sciences, energy, manufacturing and other fields.
NVIDIA CEO Jensen Huang once commented on the game business: "Video games are our killer application. It is our flywheel to enter large markets and provides huge R&D funds to solve a large number of computing problems."
Many fundamental scientific and technological advances are not driven by laboratories, but driven by consumers. The same goes for the gaming industry. The development of games and related industries can drive the development and even breakthroughs in a series of basic scientific and technological fields such as image processing technology, virtual and augmented reality technology, cloud computing and streaming media technology, user interface interaction technology, and Internet communication technology.
For example, the artificial intelligence (AI) industry that is currently being vigorously developed in our country has the acceleration technology behind it, which originated from the graphics cards that were developed and produced for PCs to meet the needs of game running. This is precisely because games are an important driver of technological development. Chips are largely driven by games. If games develop well, they will directly promote technological development.
How many people would have imagined that behind high-tech industries such as AI and chips, which are known as the "vital gate of the country", games are constantly driving forward?