Chinese Internet giant Tencent says its earnings won’t be affected by an agreement to limit the number of time kids is allowed to engage in one of the most played games.
The right to access Honour of Kings is now limited to one hour per day for children whose age is less than 12 and to two hours only for those between the ages of 12-18.
The rules were put into place following the fact that the government-owned People’s Daily labelled the game “poison” and demanded additional rules.
What is Honour of Kings? Also known in Kings of Glory, Honour of Kings is an imaginary role-playing “multiplayer battle arena online” game.
It’s quite like an additional Tencent game called League of Legends, which is the most well-known PC game.
There are some differences. As opposed to League of Legends, it’s built on historic Chinese characters. It’s also designed specifically for playing on mobile platforms.
This is one of the reasons that it is extremely well-liked in China, a country where a lot of gamers do not have access to gaming consoles or computers at home.
How can it earn money?
The application is completely free to download however players have to have to pay for upgrades to their costumes or characters to aid in their progress to the next stage.
Estimates on the amount an average player will cost vary between $1.50 to $6 per month.
It’s not a lot. However, all is a lot in the game that has greater than 50 million active monthly players.
Why do people get anxious about it?
Teachers and parents worry that kids are getting addicted to playing the game.
While ranting about games is not new. The honour of Kings has received a lot of criticism from the state-owned People’s Daily newspaper, which described it as “poison” and it was a “drug” that could harm teenagers.
The game also called for more strict regulation of online games.
Tencent’s revenue model relies on bringing existing players in order to stay longer with their offerings.
In its last annual report, its goal is to convert players who are casual into “mid-core” as well as “hardcore” players.
What is the importance of the Honour of Kings to Tencent?
Tencent earned $7.2bn during the initial quarter of the year. More than half of that – around $3.9bn was generated by gaming.
Two titles dominate its catalogue. League of Legends is the most popular game worldwide. However, is China; Honour of Kings is the highest-grossing mobile game.
Chinese Gaming Industry Database CNG estimates that the game brought in around $810.5m during the very first three months of the year. This would be about 11% of the total revenues.
Are there any regulations that are more stringent?
Tencent is a massive company. In addition to gaming, it offers social media, payment services and messaging applications (notably the hugely popular WeChat).
Tencent’s majority of business is located in China, and therefore it’s prone to regulatory changes that take place in China.
This could increase investor stress. When Tencent introduced the time limits, its shares plunged 4 per cent, slicing $12 billion from its worth. However, the shares have recovered little since the time of the announcement.
Overall the company has grown by more than 40% in the past year and claims that the new limits will not have a significant impact on the bottom line because children who aren’t 12 are the smallest portion of its users.
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