China's Game Rulebook: Licences, One-Hour Weekends and the $80bn Draft

On 22 December 2023, a regulator in Beijing posted a draft set of rules on its website. Within hours, shares in Tencent and NetEase, China's two largest game companies, were plunging. By the end of the day, about $80 billion in market value had vanished. Within weeks, the proposals had been walked back and, by January 2024, the official reported to have drafted them had been removed.

That episode captures China's game rules perfectly: the market is huge, the government's power over it is total, and policy can change direction fast. Here is how the system works, and why it matters even if you never play a Chinese game.

Step one: the licence

Every game published in China, on phones, PCs or consoles, needs government approval before release. The licence, often called an ISBN or banhao, is issued by the National Press and Publication Administration (NPPA). Domestic and imported games are approved in separate batches, usually announced monthly.

Approvals have been frozen twice in recent memory. In March 2018, after a government reorganisation, licences stopped for months; approvals fell from about 9,600 in 2017 to about 1,980 in 2018. A second long pause began in the summer of 2021 and lasted until April 2022. During that freeze, more than 14,000 game-related companies were deregistered, many of them small studios that could not survive without new releases.

Since then the flow has been steadier. In 2024, approvals averaged about 107 games a month.

Step two: protecting minors

China's rules on children's gaming are the strictest of any major market. In November 2019, players under 18 were limited to 90 minutes on weekdays and three hours on weekends, with no play between 10 p.m. and 8 a.m.

In August 2021, the limits got much tighter. Minors may now play online games for one hour, from 8 to 9 p.m., only on Fridays, Saturdays, Sundays and public holidays. Monthly spending is capped too: 200 yuan for players aged 8 to 16 and 400 yuan for those aged 16 to 18. Every account must be registered with a real name, and big publishers use ID checks and even facial recognition to enforce the rules.

The model came partly from industry itself. In 2017, after criticism in the state press, Tencent introduced time limits in Honor of Kings for young players. Our Honor of Kings feature tells that story.

The December 2023 shock

The 2023 draft, titled Measures for the Administration of Online Games, went further than any rule before it, and this time it targeted adults as well as children. Among other things, it proposed:

• banning daily login rewards and first-time top-up bonuses, staples of almost every free-to-play game;
• limiting how much virtual currency players could hold or buy;
• restricting features that reward spending, aimed squarely at MMORPGs and gacha games.

Investors read it as a threat to the core business model of mobile games. NetEase, with its heavy reliance on spending-driven MMORPGs, was hit especially hard. Regulators then softened their tone, approving a large batch of new games and signalling that they would listen to feedback. The draft was effectively shelved.

Why it matters

China is the largest mobile game market in the world, and its rules shape games everywhere. Licence freezes change which games get made; limits on minors push publishers to target adults; and gacha rules first written in Beijing now echo in Seoul, Tokyo and Washington.

For players outside China, the practical effects are clear. Many global games, from Genshin Impact (our story) to Wuthering Waves, are designed from day one to pass Chinese review, and the companies behind them often look abroad for growth precisely because the home market is so tightly managed. Our take: watch the monthly licence lists. They are still the best early signal of where Chinese gaming is heading.