Under draft rules published by China’s National Press and Publication Administrations, Reuters reports that online game operators will be prohibited from rewarding players for logging in every day, or if they spend on a game for the first time or consecutively.
They will also be required to limit how much players can deposit in their in-game digital wallets.
The new rules could still be modified and won’t come into effect before next year, but their publication has spooked shareholders in China’s two leading games companies.
Shares in Tencent, which is the world’s biggest games company, fell as much as 16% at one point, and those in NetEase dropped by as much as 25%.
“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 Morningstar analyst Ivan Su.
In 2021, China imposed strict gaming playtime limits for minors and temporarily suspended approvals of new games due to addiction concerns.
Approvals of new games resumed last year, and the new rules published on Friday include one which would require regulators to process approvals within 60 days.