With the rising of the mobile internet, more imported games have entered into the boosting online game market in China; however, the country has many limitations on the game, concerning the gambling, virtual currency and other aspects. Once the games developed overseas could not meet the legal standard, they will get no license from the General Administration of Press and Publication of PRC (GAPP) and Ministry of Culture(MOC) for the game operation in the country. To bring the international game developers a closer and clearer look into the current law system on game in China, we will post several articles for the introduction to the laws and regulations concerned.

I. The definition of the virtual currency and the game coin

The virtual currency is defined in the Notice of the Enhanced Management on Virtual Currency in Online Game issued by the Ministry of Culture and the Ministry of Commerce (note: the link is in Chinese), “the virtual currency in the online game shall refer to the virtual exchange tool issued by the game operator, purchased by the player with real money in the set rate directly or indirectly, existing outside the game program, stored in the server of the game operator in electromagnetic record way and expressed in specific digital unit. The virtual currency in the online game is used for the exchange of the game service within the given scope and time period, and could be presented as the prepaid card, prepaid amount and game points, etc, excluding the game props in the game.” On the other hand, the game coin shall refer to the reward pointes in the game.

From the above regulation, the legal definition of the virtual currency in China is so broad, which include any record of the recharge by the player in real money, involving points, coupon, Q coin and others. Although it’s not legally demanded for the game operator to provided the paid service in the virtual currency, nearly all the game company adopt it to realized the connection between the game props and the real money.

II. The virtual currency and the gambling

We were once consulted by a client for the purchase of the game props in real money instead of the game coin coming from the recharging. For that, we replied there’re no prohibitive articles on the game shopping in real money when the company not choosing the operation in virtual currency. Besides, for the consideration of China government’s concern on possible influence on the financial market from the over issuance of the virtual currency, we believe the game shopping in real money is more complying with the purpose of the legislature.

But in practices, nearly no game companies will make their business by directly selling the game props, for on the one hand the virtual currency helps the company gain more profits and on the other hand, the game shopping in real money is suspicious of gambling encouragement. Actually, the poker game is more risky of gambling determination, and also for those MMORPG games and leisure games, therefore, to operate without the virtual currency is also feasible in China. But, we would like to assess the feasibility of the game mode with more details available from our clients before games’ official launching in China.

III. The distinguish between the virtual currency and the game coin is helpful to evade the legal risk of gambling

The game coin mentioned in the article is not the same thing with the virtual currency, but only refers to kind of recording system of the marks gained by the players in the game. For the strict official attitude to the gambling in China, the wide argument over the game of mahjong or poker and the legislature to the prohibition on the gambling or gambling like game, we suggest a distinguish between the virtual currency and the game coin for the following reasons:

1. The virtual currency is of property while the game coin is not

According to China laws, “any behavior intended to win a competition with properties as stake is gambling, which is illegal no matter in what form it is and shall be rigorously forbidden.” For the it is the money prepaid by the players in the game after all, virtual currency is naturally of the property and could not be used in the game as the stake. For this reason, it could only be recorded in game coins rather than the virtual currency. Moreover, the game coin shall contain no nature of property, like not be able to buy the props or other services purchasable by the virtual currency.

2. The game coin cannot exchange with the virtual currency or the real money

For the game coin is not of property and only the recording method to the marks of the players in the game, it could not be exchanged into the real money or the virtual currency. Nevertheless, the conversion from the virtual currency to the game coin is also risky to be maintained the gambling. To our knowledge, the game platforms in China are presenting the game coins to the players for free, like the coin gift when the player buying the specific props to avoid the exchange by the virtual currency by the players. In our opinion, it’s evading the risk of gambling, and therefore it’s necessary to be no game coins of property in the online game in China.

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Author: Mr. You Yunting
Founder & Editor-in-Chief of Bridge IP Law Commentary
Partner & Attorney-at-law of Shanghai DeBund Law Offices
Email: Bridge@chinaiplawyer.com, Tel: 8621-5213-4900,
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Bridge IP Law Commentary is a website focus on the introduction of commercial laws in China, especially the intellectual property laws. All the posts here are our original works. And all news or cases referred here are from public reports, and our comments or analysis are of due diligence, neutrality and impartiality, representing our own opinions only and are our original works. You may contact us shall you have any opinions or suggestions.

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