What can PR do when 'Sin' Regulations Kick in for Online Gaming?

In proposed guidelines released on Dec. 22, 2023, China's gaming regulator, the National Press and Publication Administration, the nation's gaming regulator, sought the public's opinion to curb excessive time and money spent on online games.

Subsequently, share prices of China's leading gaming companies, Tencent (China's biggest company by market capitalization) and NetEase tumbled 12 and 24 percent, respectively, within a day.

Chinese authorities are concerned about FOMO practices to entice players to return to these games and rising levels of obesity as well as decreased levels of concentration.

These tough proposed guidelines mirror the stringent measures currently applied to the tobacco industry. This raises a crucial question for gaming giants such as Tencent and NetEase: How can public relations evolve to tackle these challenges effectively?

The parallels drawn between the current situation in the gaming industry and the tobacco industry's historical PR strategies offer invaluable lessons.

In the 1950s and 1960s, the tobacco industry used dubious statements as a shield, such as dentists recommending a brand of tobacco - a strategy devised by John W. Hill, the president of America's leading public relations firm, Hill & Knowlton?when smoking was linked to lung cancer. However, today's PR is about aligning actions with words.

Let's assume a worst-case scenario where strict new guidelines - similar to current anti-smoking guidelines - are introduced where any violations are punished with severe penalties.?But there's still plenty of questions for PR for online gaming companies to answer:

• Adopt a business-as-usual approach while awaiting guidelines to be finalized or recommend that management starts pulling back on the worst FOMO practices?
• How can they provide feedback to this regulator in a manner that is not seen as profit-first?
• Can they redefine 'socially responsible gaming' in a manner that satisfies regulators, gamers, and gaming companies?

Transparent and socially responsible PR strategies

Behind the scenes, the PR of these online gaming companies probably had a torrid Christmas and holiday period as they are working on incomplete information and intense management scrutiny.

In my opinion, things become easier once these PR departments assume that all their responses should be defensible to the parents of a young university student who is using their hard-earned money on these games. For example,

• Is your existing game marketing aligned with guidelines issued by other regulators, such as the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) in the UK? If not, self-regulating is a good idea, to set a benchmark-based basis for additional engagement.
• List the potential benefits (say, enhanced psychomotor skills for an aircraft dogfighting simulation, nurturing future esports professionals) in your games. Prepare to engage more objectively rather than make statements that may be perceived as self-serving.

Such transparency and social responsibility will be a strong signal of words matching deeds by emphasizing that the public interest is paramount and reducing regulatory zeal.

Ending on a note of caution: when trust between industry, consumers, and the government breaks down, regulators are likely to go beyond existing guidelines and implement harsher regulations. In the U.S., Australia, Singapore and other countries, it is now mandatory to include health warnings with color images for cigarette packages and advertisements. This is probably the outcome least desired by investors and management of Tencent and NetEase.