Dividends and For China’s gaming industry, everyday is doomsday as Beijing imposes new curbs

China is different than most countries and we all tend to forget what is considered normal in China. In China facial recognition and keeping control of the population is very important and China is extending control to what people do on their computers or smartphones. On one hand the facial recognition is very interesting, there was a news story about the Chinese using facial recognition at a football game and found people of interest to the police in the crowd. The person or people were caught, from a societal point of view it could be good for the rest of society that person was caught. However, we all think we have a certain level of privacy, however in China rules are changing. The Party has said kids under 18 can no longer do gaming.

In an article by Paul Mozur and Elsie Chen of the New York Times News Service, video game industry is under going massive changes. The market for gaming is very high in China and with over a billion people even if millions play, that is still a strong market. The government has decided that children under 18 will be limited to gaming for 3 hours a week and during prescribed times during the weekend. For someone under 18, to game they must show their identification card as proof of age.

Chinese leader Xi Jinping has decided young people are spending too many hours on screens and should be doing something else. But it is a complex because of the one child policy that was on changed last year and parents expecting to work long hours, gaming was a good outlook for many young people. In addition, the most popular games are made for smartphones (China is the number one user of smartphones) and are free to play. The gaming businesses make the games live and make their money by attracting large number of users and the extras which gamers have to pay for to advance to higher levels. Given the business model, the gaming companies have become experts in hooking players to play their games.

Linking to dividend paying stocks, what is great for companies to make profits such as in this case young people spending lots of time, energy and money on games is not always the best thing for society at large. Although for people above 18, it is entirely possible to work in game development, e-sports or make a good living from games. Gaming companies similar to tobacco companies it is good to get the people when they are young and allow them to age gracefully with the company products. With every product there are good aspects to the products and sometimes there are some negative, as investors you need to focus on the good.

There are more questions than answers, till the next time – to raising questions.

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