China vs video games: why Beijing stopped short of a gaming ban, keeping Tencent and NetEase growing amid crackdown

Since a deadly internet cafe arson incident in the early 2000s, video games have been regarded as yet another “spiritual opium” imported from the West

Despite console bans, censorship, and continued restrictions for minors, China’s video game industry has become enormously successful and influential

7-MIN READ7-MIN

Children play the video games on TVs at a shopping centre in Chengdu, in China's southwestern Sichuan province, on October 30, 2006. The Chinese government has long had an uncomfortable relationship with video games, and it ramped up restrictions for minors again this year. Photo: AFP

Published: 9:00pm, 19 Nov 2021

It has been a wild year for China’s video gaming market. Stocks took a dive in August following an editorial lambasting internet games as “spiritual opium”. Then Beijing placed additional restrictions on the amount of time children can spend playing games – just three hours most weeks – again battering tech stocks, especially those of Tencent Holdings and NetEase.

Since then, things have calmed down a little. It turns out that many children are still finding ways around ever tightening restrictions, often with parents’ help, and China’s industry behemoths are still raking in tons of cash on the popularity of their titles. Tencent finally got a China release in the fall for the long-awaited mobile version of League of Legends, but new game licenses were effectively frozen after July.

Video games have simply become more important to China’s economy, despite long-standing hostility from Beijing regulators. Some of that antagonism was in response to distrust from parents in the early 2000s, but there is also a more deep-seated wariness of the medium.

Here is a look at where that hostility comes from, how it led to China’s current video gaming restrictions, and what it means for the industry going forward in the world’s second-largest economy.

What does China have against video games?

The Chinese government’s antipathy towards video games goes back to that term used by state media in August: spiritual opium.

The term has a long history in China, and has traditionally been used when railing against foreign cultural products. In 1961, Communist Party mouthpiece People’s Daily published an article referring to American books and films as spiritual opium, calling it “ideological poisoning” worse than literal drugs.