How much impact does the policy have on game stocks? A number of A-share companies responded urgently, and experts have the latest interpretation!
On December 22, the game sector of A-shares and Hong Kong stocks fell hard. Tencent fell 12.348%, down more than 15% intraday, while NetEase fell 24.598%, down nearly 28% intraday.
In the A-share online game sector, 9 companies fell by more than 10%, and more than 10 companies fell by 10%, of which Shengtian Network fell 17.52% and Glacier Network fell 17.28%. The A-share online game index (884080) fell 9.76%, the game ETF (516010) fell 10.04%, the game animation ETF (516770) fell 10.03%, and the media ETF (159805) fell 9.08%.
On December 22, the National Press and Publication Administration issued a notice on publicly soliciting opinions on the "Measures for the Administration of Online Games (Draft for Solicitation of Comments)" (hereinafter referred to as the "Administrative Measures").
Industry insider: There is an impact but there is no need to overreact
In an interview with Securities Times E Company, a number of industry insiders believe that if some provisions of the "Management Measures" are strictly implemented, they may indeed have an impact on the operation of game products, but the current market reaction as a whole is somewhat excessive.
"We are also still Xi and researching specific terms, and at the moment I am mainly focusing on the reaction of the stock market, which is a bit of a surprise and overreaction. The market is pessimistic, and I personally don't feel the need to over-read it. An industry insider told reporters.
"Even without these regulations, as a recreational business, the entire market space for games has been squeezed by products such as short videos. The opponent of the game is not the new regulations, and the market reaction is essentially a matter of expectation management. The above-mentioned person said.
A person from a listed company told reporters, "These content requirements were actually issued several years ago, and they are not the first time they have been proposed." This time, it is estimated that after the adjustment of the competent department of the industry, the previous system achievements will be consolidated on the basis of the original content requirements. Friends who are not familiar with the situation will worry about whether the policy direction will change again. ”
"In fact, in the past five or six years, standardization and self-discipline have become the consensus of the industry, and the construction of industry systems and enterprise practices have been quite effective. The more trust is fragile, the more we must calm down, unswervingly believe in the party, and work hard to seek a new situation. The listed company said.
Another analyst pointed out that the "Draft for Comments" is also a kind of macro-control baton, which essentially encourages game manufacturers to stick to users through innovative gameplay and experience, rather than using marketing methods to trick users.
Tencent also said on December 22 that the draft of the new management measures will not fundamentally change the key elements such as the reasonable business model and operation rhythm of games. The new version of the management measures released by the regulatory authorities this time clarifies the support attitude for the industry, especially in the encouragement of high-quality original games.
"From the overall content of the "Administrative Measures", it is a combination of the two major parts of the previous competent government departments' management of online games: game publishing and game operation, and adds some new regulatory provisions. Among them, the administrative provisions of the publishing part, mainly from the "Regulations on the Administration of Publications" (revised in 2020) and the "Online Publishing Management Services", have a great continuity in content, and this part should not have a significant impact on the current regulation of the game market. Lawyer Si Binbin of Beijing Taoan Law Firm told reporters.
Among them, some of the provisions on the management of game operations (mainly concentrated in Chapter 3) are derived from the previously released Interim Measures for the Administration of Online Games (revised in 2017) and the Notice of the Ministry of Culture on Regulating Online Game Operations and Strengthening Supervision During and After the Event. The new Administrative Measures draw on parts of the two above-mentioned normative documents, continue the scientific and rational nature of the regulatory rules, and conform to the normal expectations of the online game industry. Si Binbin said.
However, Si Binbin also told reporters that the "Management Measures" for the supervision of game operations, added some new regulatory measures and requirements, such as the implementation of these regulatory requirements, many game operation methods or activities that have been matured and landed, and even game operation methods or activities that are commonly used in the world are expressly prohibited by legislation, which will have a significant impact on the normal operation activities of the vast majority of domestic games.
A number of provisions are a cause for concern
The reporter learned that many provisions in the "Administrative Measures" have been mentioned or involved in the relevant management regulations issued before. The content that has attracted widespread attention this time is mainly focused on Article 12, Article 17, Article 18, etc., involving the first and second recharge of the game, recharge limit, forced battle, version number online and other aspects.
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Article 12: Make requirements for the time for online games to go online and operate after they have obtained a version number. After online game publishing and operation units obtain online game approval documents, they should follow the requirements of the approval documents and organize game publishing and operations within one year from the date of issuance of the approval documents.
At present, there is no hard and fast rule on the launch time of a game product after it obtains a version number. According to the new requirements, game products need to be launched within one year after obtaining the version number. Industry insiders believe that this aspect will speed up the pace of new games online, and at the same time, it will put an end to the hoarding of edition numbers. However, due to the uncertainty of the release of version numbers, this will put forward higher requirements for the development, testing and product launch arrangements of game companies.
Article 17 mentions that online game publishing business units must not set up compulsory battles in online games. At present, there are differences in the understanding of "forced battles" in the industry, and there are opinions that the requirements for "forced battles" may affect game activities such as "gang wars" and "national wars" in some games, but there are also opinions that some SLG (strategy games) categories based on forced battle gameplay may face major adjustments.
"There is no need to ban all forced battles. Si Binbin said that at present, most regular games set up mandatory battles, generally by the user to choose whether to enter the mandatory battle activities or areas, if users think that their rights and interests have been infringed, turn off the function. The so-called mandatory battle gameplay settings are not an important cancer in the game industry that infringes on the rights and interests of players, and there is no need to make mandatory provisions for specific gameplay functions and settings for additional supervision.
Also widely controversial is Article 18, which mentions restricting excessive use and high consumption of games. Online games are not allowed to set up inducing rewards such as daily login, first recharge, and continuous recharge. Online game publishing business units must not provide or condone high-priced transactions of virtual props through methods such as speculation or auctions. All online games must set user recharge limits and publicize them in their service rules, and pop-up warnings should be given to users' irrational consumption behaviors.
The previous relevant regulations only have requirements for minors to recharge, but do not put forward requirements for the first recharge and recharge, adult player recharge limit, etc. Some people in the game industry told reporters that daily login bonuses, first charge and recharge discounts, etc., are important marketing methods for many game products at present, and they are also a mature business model. If this regulation is implemented and strictly enforced, it may indeed have an impact on the revenue of game products.
"The first deposit bonus is used in many applications, including the first month fee discount for many products on the market, which is an important way to attract users to pay. The amount of the deposit limit has not yet been clarified, which is the key. If the limit is too low, the impact will be significant, especially in games that rely heavily on top players. The above-mentioned person said.
Si Binbin also told reporters that the reward of "daily login, first recharge, and continuous recharge" belongs to a very common business model in various industries, and it is difficult to define it as "inducing reward";
Article 21 mentions that before obtaining approval from the competent state departments for publication, online game operations units conducting technical tests of online games shall ensure that the content of the online game meets the relevant requirements of these Measures, and the number of test users must not exceed 20,000, and the data of the test users shall be deleted.
At present, some games are launched in the name of testing before getting the version number, but they do not open functions such as recharge. The "Administrative Measures" require that the number of test users shall not exceed 20,000, and the online operation of game products in the name of testing will not be feasible in the future.
A number of companies responded to the impact
On December 22, the game sector of A-shares and Hong Kong stocks fell hard. On the interactive platform, many investors are concerned about the operation of related corporate game businesses. On the afternoon of December 22, a number of A-share companies responded through interactive platforms or public means.
Kaiying Network told the reporter of Securities Times E Company that the "Management Measures" currently have no substantial impact on the company's operation. The company will carefully study Xi research, actively follow up on feedback, and believe that the game industry will achieve high-quality development on a more standardized basis and contribute to the national economic development.
Tencent said that since the release of the new regulations in 2021, Tencent has been strictly implementing the management requirements, and the game time and consumption data of minors are currently at the lowest level in history. Tencent Games will continue to adhere to the high-quality strategy of technological innovation and culture, and with the support of the competent authorities, it will practice the high-quality development of China's game industry.
Tianyu Digital responded on the interactive platform that as of June 30, 2023, the company's operating income in the data traffic industry accounted for 95.87% of the company's operating income, and the company's overall business is more focused on the direction of the data traffic industry, and the "Management Measures" have little impact on the company's overall operation.
Huicheng Technology said on the interactive platform that since 2021, the company's game business, especially the mobile game purchase and distribution business, has poor profitability due to intensified competition in the industry, so the company is gradually reducing the scale of the game business and shifting the focus of strategic development to the intelligent manufacturing business. According to the company's 2022 annual report, the proportion of the company's main business revenue from the game business is only 7.7%.
Rock Mountain Technology said that the company's main business includes Internet information service business, artificial intelligence business and diversified investment business. Among them, the Internet information service business is centered on 2345.com, and website promotion and marketing services are the mainstay, and the revenue generated by game promotion and marketing services in 2022 will account for less than 10%. Other than that, the Company has no other game business and game products. If the "Management Measures" are implemented, the impact on the company will be small.
Sanren said that the company has no online game-related business, nor does it have customers in the game industry. The company mainly serves the customers of central enterprises and state-owned enterprises, and its marketing content and brand positioning are in line with and carry forward the core values of socialism, develop advanced socialist culture, carry forward revolutionary culture, and inherit the excellent traditional Chinese culture.
Hengxin Oriental said that the company's business does not involve online game publishing business activities related to the "Measures for the Administration of Online Games (Draft for Solicitation of Comments)", and game supervision has no impact on the company's performance.
Fuchun also said that in 2022, overseas revenue accounted for 88.59% of the company's game revenue. If the "Management Measures" are implemented, it will have little impact on the company's existing operating game products.
In addition, companies such as Yuanlong Yatu, Visual China, Langma Information, Reader Culture, and Happy Blue Ocean have all responded that they do not involve or have no game-related business for the time being, and the "Management Measures" will not affect the company's operation.
Editor-in-charge: Peng Bo
Proofreading: Zhu Tianting