ESTNN's Malik Shelp sheds some light on how China's draconian video game policy is influencing American video game developers.

Unless you’re out of the loop, it’s pretty common knowledge that China holds a monumental stake in the gaming industry. They provide a substantial percentage of the user base for popular games like League of Legends and Fortnite, making them a stalwart influence on gaming companies.

In fact, the Los Angeles Times wrote an article on China’s influence on U.S. game companies and the privacy issues that it brings. Today, I want to talk about some of the things that the article addresses, along with providing some more context on how this could become a problem for the gaming industry.

Tencent holds the Reigns

The majority of the concerns surround Chinese investment holding company Tencent and their sizeable share in the gaming's global market. Tencent is a technology-based "entrepreneurial" company that has holdings in games such as PUBG, League of Legends, Clash of Clans, and Fortnite. Tencent is based in Shenzen, China, but most of its holdings are with American-based companies. This is where the complications begin.

China faces a massive problem of gaming addiction, with media reporting the growing problem. Many of those reports focus on deaths in internet cafes from “over-gaming.” China has proclaimed gaming addiction a national problem and has even reported that its armed forces have seen repeated cases of mobile game addiction.

Understandably, the Chinese government wants to minimize this addiction amongst their citizens, but their methods have so far been questionable. Along with severely cutting back on which foreign games make its way to Chinese shelves, China also forced Tencent to implement the use of National IDs to register for online games.

In China, National IDs are the equivalent of Social Security Numbers in the States. By using these national IDs as player identifiers, governments can see how long players are on for. They have even forced gaming companies to develop and implement privacy invasion software into their games.

For example, Tencent asked developers at Riot Games to implement an anti-addiction software into League of Legends. This comes in the form of time limitations for minors, restricting certain time-based rewards, and kicking people from the game should they play for too long. Sure, everyone's parents yelled at them to stop playing video games, but what if it was your government instead?

China's New Social Credit System Will Be Used to Restrict Video Games

To make matters worse, a new social credit system coming to China in 2020 provides all citizens with a social credit ranking, similar to Black Mirror's infamous “Nosedive” episode. The system will track things like spending habits, loan repayment rates, and, of course, how much time an individual spends playing video games.

The consensus among Data Privacy professionals is that U.S. companies should not be building software that enables invasive techniques to acquire data. The problem is, U.S companies have been doing that for years in the name of profits.

America's Largest Devs are Bending the Knee

Earlier this year, Blizzard added a 3-hour limit on how long Chinese players could be online on at the behest of the Chinese government. Back then, players could get around it by creating multiple accounts, but with China's national ID verification, that workaround will become impossible. In addition to Riot and Blizzard bending the knee to China in the name of profits, Epic has put an ID system into Fortnite that will track and potentially limit users' playtime on Chinese servers.

In the United States, the idea of giving a video game company your social security number sounds like a Black Mirror episode, and definitely not one of the fun ones. Players should care about the issue of Global Data Privacy laws. Video games are at the forefront of new technology, and when company profits collide with ethical values, more often than not the consumers' privacy is discarded as nothing more than dollar signs.

Many have pushed back on Riot and others bending to Tencent's and China's will, but you can't blame them. Having a $367 billion parent company threaten to remove your largest market is a pretty good incentive to comply. It is up to the players and lawmakers to push against invasive practices in the gaming industry despite its best intentions. After all, Oppenheimer had hoped for atomic energy, not atomic bombs.

Image VIA: NBC News