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China Should End Tax Breaks for Gaming Sector, Securities Times Says

Teenagers try mobile games at the China Digital Entertainment Expo. File photo: AFP.

• State paper says tax breaks should be redirected to help ‘people’s livelihoods’

• Gaming industry ‘should be mentally prepared,’ report says


(AF) China should stop giving tax breaks to gaming companies because they are competitive globally and don’t need the support, the Securities Times newspaper said, adding to fears about a potential crackdown on the industry. 

”The funds should be used for the urgent needs of people’s livelihood, and taxation should be equal to other industries,” the newspaper said in a commentary. ”In this regard, the game industry should be mentally prepared.”

The report comes as the Chinese video gaming industry has in recent days become a topic of multiple state media reports, triggering investor concerns that the industry could be next in line to be targeted by Beijing regulators.

On Tuesday, the state-backed Economic Information Daily called online video games “spiritual opium” in an article that went viral and wiped $60 billion off the share price of gaming giant Tencent Holdings Ltd at one point. The phrase was later edited out of the piece.

“The government should no longer need to give industry support when these software industries have developed and obtained comparative advantages,” said the Securities Times, one of the nation’s most influential newspapers that often reflects official thinking. ”Gaming companies should also take on more social responsibilities. In addition to protecting young people and making good game content, they can also give back to the society in taxation.”

There was also a modicum of praise for the industry in the commentary, which said if it maintains current development momentum it may become an exporter of Chinese cultural influence, boost overseas consumers’ recognition of China and ”enhance China’s soft power.”

Tencent limits minors’ playing time, spending

Tencent was forced to cut playing time on its most popular game, ‘Honour of Kings’, for children under 18 from 90 minutes to one hour on weekdays, and from three hours to two on weekends and holidays. The new rule to appease national officials came into effect on Wednesday, according to the South China Morning Post.

It said ‘Honour of Kings’ was the first game to average more than 100 million players per day and raked in $2.6 billion in in-app revenue last year, according to estimates by Sensor Tower, an app-tracking firm that said in December it was the world’s most profitable game.

Young gamers were also banned from playing between 10pm and 8am, and limited on how much they could spend on content they download. Children under 12 are banned from spending money to top up the game, the company said on its WeChat account, while those aged from 12 to 18 also face a limit on what they can spend per month.

“We hope we can help children develop a healthy gaming habit, and we are doing our best to reduce family problems stemming from kids’ gaming activities,” Tencent said, according to the SCMP report.

Jim Pollard and Reuters

This story was updated to change its byline.


Tencent Curbs Video Games After State Media Calls Them ‘Spiritual Opium’

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