Bilibili launches new online games as regulators tame the sector

Chinese video-sharing platform Bilibili launched 16 new games on Wednesday, each with anime-inspired graphics specifically aimed at young players, at a twitchy time when government officials are tightening control on the online video game sector.

Bilibili’s virtual launch event was livestreamed on its website and showcased new immersive games, story-based otome games that cater to young women, and games that feature elements of traditional Chinese culture—all formats that are increasingly popular among China’s Gen Z players.

Bilibili is listed in New York and Hong Kong. It is seen as a Chinese counterpart to YouTube, and has one of the most active online video user bases with a target demographic that skews toward younger people, with 20 as the average age of its new users. Bilibili had 223 million monthly active users in Q1 2021, according to the company’s financial results.

Although known for its animation, comics, and game content uploaded by creators, the platform has been investing in games for years. Last year, Bilibili beat Tencent and NetEase to acquire China publishing rights for Fall Guys: Ultimate Knockout, a globally popular battle royale game. Its own e-sports division raised USD 28 million in January. Then, in April, Bilibili made headlines when it used 1,500 drones to form a glowing QR code in the night sky in Shanghai. Scanning the code took users to the landing page of Japanese role-playing game Princess Connect! Re:Dive, which is distributed by the company in China.

As is the case for Tencent, video games are an important source of revenue for Bilibili. Its income from the mobile games was RMB 1.17 billion (USD 178.7 million) in Q1 2021, or around 30% of the company’s total revenue in that period.

Bilibili’s new games are being released at a tense time for game developers, as the Chinese government may create even stricter rules for the sector, particularly related to the way minors can access online games. State media outlet People’s Daily published an article on Wednesday that said a newly amended law indicates online game companies cannot provide their services to minors between 10:00 p.m. and 8:00 a.m. the following day.

Bilibili pledged to upgrade its anti-addiction system and implement tighter restrictions on minors’ screen time.

Even before the latest adjustments, Chinese officials have shaped a stricter regulatory environment for video games compared to any other country. At the moment, investors are concerned that regulators are prepared to severely disrupt the sector, like what happened with for-profit education providers, according to the Wall Street Journal.

The market is still spooked by these developments. The stock prices of major online game companies are still stumbling. Bilibili, Tencent, and NetEase each witnessed their stocks dive by up to 12% since Monday.

Author: Jiaxing Li, Kr-Asia

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