The Ministry of Culture endorsed a parental rights
strategy for online games to be led by companies rather than by the government.
This means that companies would opt to offer ways to enable parents to monitor
whether their children are spending too much time on online games. There is an
Anti-Fatigue system in China that is supposed to prevent gamers under age 18
from spending more than 3 hours online at a time on one game, but it relies on
real name identification. There is also a real name identification regulation
that requires gamers to register with their real name to make sure they are
behaving appropriately for their age. That is often bypassed by young gamers
using their parents' information to register, without their parents' knowledge.
The new system, offered by NetEase and Tencent thus far, will hopefully help
parents protect their children from addictive gaming.
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The US government's political wish of unpegging China's
currency from the US dollar seems to have gotten closer to coming true this
week. A rise in the value of the RMB against the dollar would make Chinese game
outsourcing slightly more expensive for US publishers, and the prices already
have been rising for outsourcing there in the past few years. Foreign developers opt to use Chinese
outsourcers because of the art talent and increasingly the programming and
design talent of the developers there. The country has lost competitiveness
against India, Eastern Europe, and parts of South America in terms of contract
pricing, but there is still a significant discount over labor costs in
the West that it makes outsourcing to China worthwhile. The quality, IP
protection measures and several years of experience mean China will remain a
compelling place for game outsourced development even if the RMB value rises
against the US dollar a little bit.
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NetDragon continues to attract foreign capital and foreign
licensed products. The company's executive mindset is international and seems a
bit different from the very large online game operators in Shanghai who have international aspirations (and in
some cases foreign offices), but who still act very "Chinese." There is nothing
wrong with that, since they are Chinese and primarily serve the market in
China, but it is worth noting that NetDragon could be one company to watch.
Unfortunately it hasn't had many blockbuster hits. In fact only one game
(Eudomons Online) has been in the Top 10 MMO lists for a few years but not in
the Top 3. And in this hit-driven business, the lack of hit titles means
limited success.
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