China's Ministry Of Culture Introduces New Online Gaming Regulations

China's Ministry of Culture is asserting its stewardship of the region's burgeoning online game business, tightening restrictions with new regulations it says are aimed at protecting minors from "unwholesome" content. The rules, which are effective August 1, don't specifically define "unwholesome", but will illegalize content related to pornography, violence, gambling, cults, superstition and any other content defined as "cruel" or "horrifying" in online games playable by those under the age of 18, according to a report from Chinese business publication Xinhua. The regulations say only virtual currency can be used to buy and sell items and goods in online games -- transactions in which the regulations also forbid minors from participating. Online game companies are also required to develop methods to regulate the amount of time young people spend playing, with the aim of preventing addiction. As China's online game industry -- worth $3.9 billion in 2009, according to Pearl Research -- continues to grow, the region's government seems increasingly concerned with content regulation. After international reports of young people fainting or dying from exhaustion after gaming marathons in internet cafes, and following concerns about the appropriateness of in-game content, China has begun to treat online gaming in part as a public health issue. Regulatory processes were the pivotal snag delaying the re-launch of Blizzard's World of Warcraft in the region after its operations changed hands from The9 to NetEase. Government-mandated content changes to the game included the replacement of red blood with a more vague black mist, and the placement of boxes or sandbags wherever skulls, bones or bodies originally appeared. Also key in WoW's China relaunch delay was contention between which of the government's regulatory bodies held primary responsibility for content supervision. China's General Administration of Press and Publication and the Ministry of Culture are often in conflict over which is the main regulatory body for online games. The two bodies continue to conflict; in October 2009, GAPP released a statement indicating its pre-approval is needed before any online game can be launched in the territory, and completely forbidding any foreign investment in Chinese operators of online games. But the Ministry of Culture responded by criticizing GAPP's "surly interference" in the online game industry and by reaffirming its commitment to keeping the business under its cultural purview. Analysts project the Chinese gaming market could hit $11 billion by 2012. There are believed to be 69 million online gamers active in the region, but internet penetration currently stands at only about 27 percent. As adoption is anticipated to rapidly grow, as many as 230 million Chinese are expected to be playing online by 2012.