Chinese crackdown on app developers

The publication China Daily reports that the country’s Ministry of Culture is cracking down on gambling content within mobile apps, and has warned developers that such content will not be permitted.

27 mobile game publishing platforms and app-store operators, including Baidu App and Android Market, were warned last year to avoid gambling content in apps, and change any already published apps which had inappropriate content before the end of 2013.

The Ministry considers that lottery-style in-app purchases – known in Japan as “Kompu Gacha” – within a game increase a player’s chances of winning or receiving a reward, and are considered to be gambling due to the random nature of lotteries and the uncertainty of rewards.

Twenty companies have thus far submitted reports to the ministry about corrections they have made in their apps or games, deleted sensitive information that pertains to gambling and cancelled lottery-style in-app purchasing.

The seven other companies failed to make corrections by the year-end deadline and have received administrative penalties, according to the China Daily report.

Two of those companies, both in Shanghai, were fined 60,000 yuan ($9,755) and 130,000 yuan respectively.

Yu Yi, a Chinese game analyst, told the newspaper that due to rapid growth in the market, there is a need to combat the rise of gambling in mobile games and related products. The main responsibility for that lies with the developers, he said.

Yu explained that the government’s policy is to remove and regulate games that have obvious gambling elements. He added that regulations won’t have a major effect on the overall market, but its impact on lottery-style in-app purchasing will be significant.

Zhang Liang, a managing director at Beijing-based mobile solutions company PapayaMobile, said China’s mobile game operators often imitate their Japanese counterparts, specifically in adding gambling-related content into games.

The advent of the ban would ensure that all mobile game operators focused on the problem to ensure they were not breaking the law, he opined.

The China Daily quotes Ministry statistics that show the market for mobile games reached 13.8 billion yuan in revenue last year, a year-on-year increase of 112.6 percent. The country now has 170 million users of offline mobile games and 120 million of online games.

Li Gang, an official with the ministry, said the ministry is ready to take further actions to help regulate the market, which will include releasing a manual detailing irregularities in in-app purchases and updating its blacklist of companies found advocating “gambling and vulgar content.”