The implementation of the new anti-addiction policy for half a year is a blessing or a curse for game manufacturers

【CNMO】 With the rapid development of smart phones, people's entertainment methods have become diverse, and many people will pick up their mobile phones to brush short videos and play games in their leisure time. Due to the blossoming of the mobile game market, many people's views on mobile games have gradually changed from entertainment to social, taking the current popular "Glory of the King" as an example, many people are looking for interesting souls and like-minded people in the game, and then deeply develop friendship.

The new anti-addiction policy is a blessing or a curse for game manufacturers

In general, adults' self-control is relatively strong and will not be overly addicted to games, but minors are susceptible to the influence of the environment, resulting in excessive addiction to games and no intention of learning. On August 30, 2021, the State Press and Publication Administration issued the Notice on Further Strict Management and Effectively Preventing Minors from Addicting to Online Games, which further tightens management measures in response to the problem of minors' excessive use or even addiction to online games.

After the introduction of the new anti-addiction policy, many minors complained bitterly, and the game time was only from 20:00 to 21:00 every day on Fridays, Saturdays, Sundays and statutory holidays, and the game time was only 3 hours per week. The new anti-addiction policy not only makes minors feel "painful", but also major game manufacturers have been affected. After half a year, I believe that many people have adapted to the new anti-addiction policy, so is it a blessing or a curse for game manufacturers?

I believe that many people will certainly not be unfamiliar with Tencent, Tencent's games are welcomed by the majority of young people, and there are many minors. According to Tencent's financial report released on March 23, the revenue of the value-added service business in the fourth quarter of 2021 increased by 7% year-on-year to 71.9 billion yuan, and the revenue of games in the local market was 29.6 billion yuan, an increase of 1% year-on-year, driven by games such as "Glory of kings", "Battle of the Golden Shovel" and "League of Legends Mobile Game", and partially offset by the decline in revenue of "Tianya Mingyue Knife Mobile Game" and "Peace Elite".

Tencent earnings report

According to the financial report, in terms of restricting the game time and consumption of minors, in the fourth quarter of 2021, the total length of games for minors decreased by 88% year-on-year, accounting for 0.9% of the total game time in Tencent's local market; the total flow of minors decreased by 73% year-on-year, accounting for 1.5% of the total flow of games in the local market. Tencent expects that the impact of the protection measures on revenue will be fully digested in the second half of 2022. It can be seen that after Tencent implemented the new anti-addiction regulations, the total length and flow of minors in its games have decreased sharply, but it seems that the game revenue is still on the rise, can it be explained that the new anti-addiction regulations have no impact on game manufacturers? Let's take a look at other game manufacturers and then make a conclusion.

NetEase Games

Among domestic game manufacturers, NetEase Games is the first gradient, and its ability to absorb gold is comparable to Tencent Games. On February 24, NetEase Games announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2021, with net revenue for the fourth quarter of 24.4 billion yuan (US$3.8 billion), an increase of 23.3% year-on-year, of which net revenue from online gaming services was 17.4 billion yuan (US$2.7 billion), an increase of 29.8% year-on-year.

NetEase financial report

In the past three quarters, NetEase's mobile game revenue was 10.5 billion, 11 billion and 11.8 billion yuan, and the revenue of terminal games was 4 billion, 4.9 billion and 5.6 billion yuan, respectively. From the perspective of the entire 2021, NetEase online game service net revenue of 62.8 billion yuan, an increase of 15% year-on-year, mobile game net revenue accounted for 70.4% of the net revenue of online game services, it is reported that the year-on-year growth in the gross profit of online game services is mainly due to the "Celestial Oracle" mobile game, "Forever Doom", "Harry Potter: Magic Awakening" and other newly launched games, and the listing time of these games is basically concentrated in the second half of the year, just "catching up" with the new anti-addiction regulations. It can be seen that the new anti-addiction regulations will not have a significant impact on NetEase games.

Since the new anti-addiction regulations have little impact on game manufacturers, what are the disadvantages and benefits of this regulation? Juvenile protection work is a long-term task, should always be placed in the top priority position, anti-addiction new regulations are conducive to regulating minors' play time, the prescribed time period of play can greatly prevent minors from "exploiting loopholes", and then let minors combine work and leisure, study well during learning time, and relax well during game time. At the same time, the new anti-addiction regulations can also help parents manage their children, many parents are busy with work and have no time to take care of them, examples of children playing games day and night abound, and the introduction of new anti-addiction regulations can put an end to this phenomenon very well.

Of course, although the new anti-addiction regulations have many benefits, the drawbacks are also more obvious. Since the child can only play games for a total of 3 hours a week on Fridays, Saturdays and Sundays, from Monday to Friday, the child may be concerned about the evening play time, thus distracting the learning; after staying up for four days, the child may play a "retaliatory game", and when the game time is specified, he will put down the things at hand and put into the game world, and everything must be "leaned back"; on Monday, the child may still be immersed in the game world of the previous day, resulting in a poor learning state.

In the final analysis, is the new anti-addiction policy a blessing or a curse for game manufacturers? Tencent revealed as early as 2020 financial report that the flow of minors under the age of 18 accounted for 6% of Tencent Games in China, of which the flow of minors under the age of 16 accounted for 3.2%. It can be seen that in fact, the contribution of minors to the overall revenue is very limited, but due to the large recharge of minors and the incidents caused by the frequent, anti-addiction new regulations can prevent the occurrence of this kind of thing to a certain extent, which is also of great benefit to game manufacturers. Therefore, CNMO believes that the benefits of the new anti-addiction regulations outweigh the disadvantages for game manufacturers.