(Yicai) Dec. 25 -- China could still change the proposed new cap on what users can spend on video gaming, analysts said, after last week’s announcement wiped billions off the market values of developers such as Tencent Holdings and NetEase.

Some of the controversial clauses in the new draft rules from the National Press and Publication Administration, published on Dec. 22, are expected to be modified, analysts said. The regulator proposed restricting excessive in-game spending, banning incentives for daily log-ins, as well as prohibiting trading of high-value in-game props. 

Shares of Tencent [HKG: 0700], China’s largest game developer, plunged in Hong Kong trading by more than 12 percent that day, while rival NetEase [HKG: 9999] dived nearly 25 percent. Perfect World [SHE: 002624] fell by its daily 10 percent limit.

Following the sell-off, the NPPA issued a public response on Dec. 23, stating that the new rules are geared to promote the healthy development of the online gaming industry. Regarding the concerns and opinions raised by the public, the watchdog will carefully study them and further modify and improve the regulations after listening to the opinions of enterprises and users, it said.

The most controversial clause suggests that all games should set upper limits on user spending and make those restrictions transparent, Zhou Liangjiu, an internet and media analyst at Soochow Securities, told Yicai. They should show pop-up reminders to warn players about irrational splurging. A lot of issues exist about this clause which await joint discussions involving various authorities and the gaming sector, said Zhou.

More time is needed to implement the rules as it is unclear who should decide on the cap and based on what standards, Zhou said, adding that more guidance is needed for games that have different kinds of business models.

The impact will be significant for games with a high average per capita spending, but the extent of that impact will depend on the implementation of the rules, said Yuan Weijia, an internet and media analyst at Shenwan Hongyuan Securities. For games with low spending per head, the rules will have little effect, and they will not impinge on developers’ growth overseas, he added.

Video game sales in China will reach CNY303 billion (USD42.5 billion) this year with about 668 million players, according to a committee under the China Audio-Video and Digital Publishing Association. Each user will spend CNY454 (USD64), which is not very much, Yuan said, citing the statistics.

Editors: Dou Shicong, Emmi Laine