Business of Esports TV: Big Brother Tencent

(Livestream 139)

In this segment, we discuss how Tencent is using facial recognition to identify minors.

The Business Of Esports brings you news, debates, and all the information you need to know about the gaming sector, the world’s fastest-growing market. With Paul “The Profit” Dawalibi leading the charge, and a variety of special guests, BoE TV is the only place to find insider information on the esports industry!

Check out the full livestream here:

Paul Dawalibi 59:52
I think three to five grand is a is you we will start seeing chairs to John’s I think john put it very like succinctly but it will be part of the overall gaming experience, not just something you sit in. And wait says new discord status, Paul is sitting in his chair while listening to Spotify. This is true. Alright, let’s move on. Let’s do, let’s do a serious topic here, guys, because between LeBron and the chair, let’s do something a bit harder hitting. Hang on this one news out of China. And the headline here is Tencent deploys facial recognition. To detect minors gaming at night, the Chinese tech company will use its midnight patrol system to keep tabs on minor screentime as it continues to combat gaming addiction among younger players. I really have one question for you guys here. So obviously, basically what it’s doing is Tencent is going to have software, like a facial verification system that’s built into their games. And it will detect individuals who spend time online at night and basically shut them down like essentially refuse them ban their accounts, block them from playing the games. And this is for anyone, this is for minors between 10pm and 8am. I’m curious if you guys think this changes, any of the math people have been doing in terms of the size of the gaming market in China, or the potential for the gaming market in China? Do we have to rethink some of the opportunities, the scale of the opportunity there? If there are going to be these kinds of restrictions?

Jeff Cohen 1:01:46
I don’t think I mean, it’s a good it’s a good point. I don’t I don’t think so only because I think that this isn’t the first time that the government has had, you know, different various different crackdowns on, you know, younger kids gaming. So I don’t know how different This one is from from sort of previous ones or how long these things last? Or if there’s ways that people easily get around them. But it’s an interesting thing that I wasn’t sure where we were going to go with this story. Because obviously, there’s a million ways you could you can take it, you know, this could turn into a geopolitical conversation or a conversation about Okay, is it is it a good thing for miners to, for us to cut down on minors? gaming, we don’t want to go in those directions. So I think you actually adding a good question. But yeah, I mean, I don’t I think that all of that is sort of a little bit baked in. And to some extent, you know, I think that people spend too the amount that they have in their wallet, if that makes sense. So what I mean by that is, if I am a miner and I have an allowance of $30 a week, and I spend $15, on a gaming, I will spend those $15, whether it’s in five hours of time, or 10 hours of time, most likely, you kind of can’t spend more than you have. Maybe at the very margins, you get people with addictive personalities that are staying up all night playing these like effective slot machine games and like spending beyond their means. But those people turn out and those people will spend that money anyway, because they have addictive personalities. So I think the willingness to pay is is where you’re going to hit up to on the demand curve, rather than, you know, just like shrinking the time applying isn’t going to shrink the depth of wallet, I guess.

Paul Dawalibi 1:03:29
William, you have

William Collis 1:03:31
I know you’re all assuming that this technology actually does something. And I would think two things. Either one, it’s easily defeated, right? Because like, I don’t think you’re gonna stop kids from playing games, if they were the only people who can really stop kids from playing games are parents and themselves, right? I think either the technology a the technology can be pretty easy to get around, in which case someone will find a way to get around it, it will probably get across online forums, and it won’t do anything. That’s option one, or Option two is the technology is very effective, in which case people will just play non Tencent games. I really think like that strongly about this, I think people who want to game at nine or pure kid you want to play games at 910 or 11 o’clock at night, like you’re going to try to play you’re going to find ways to play those games. So I don’t think it’s I think it’s a cool story. I think it’s really exciting. It points to new things. And I think in general it points to new areas where gaming can be policeman’s entering that gaming is so socially powerful, it needs to be policed, but I don’t think this particular thing will have much of an impact at all.

Lindsay Poss 1:04:34
Well, it’s also very loose in how they intend to enforce it in it says something about they will kick someone off if they spend excessive time gaming between those hours, but there’s no real definition for what excessive time is. And I also think access to devices, they don’t define the age of children. And I think that, you know, most parents have a pretty good grasp on that. four year old has a device or not. So I think there’s just there’s a lot of factors to determine if this will be successful. But I, I just to William’s point, I think it’ll either go by the wayside or by be easily defeated. Given that it’s in such general terms Anyway,

Paul Dawalibi 1:05:18
I’m really doubtful that it’s easily defeated. Like, they say in the article, it will be linked with big data from the central public security system, like literally the communist government’s own, like facial database and things like that, like, this seems like a serious effort to clamp down and I, I think in the in the environment there, it’s not something you usually mess with. Like, they’re also they also cap purchases to Jeff’s point. So it’s like, if you’re, you’re spending a lot outside of those hours, or there’s patterns of addiction or things like that, then they can clamp down on that too. It’s just to me, this is minor. So they’re talking at like under 18 10pm, after, like, after 10pm is, I would think when a lot of 1617. You know, this is the hours you play, you’re not playing at five and you know, five in the afternoon or four in the afternoon. I personally think this is gonna have a serious impact. And, and, you know, just saying let’s not play Tencent games. I mean, what games in China are not at least partially owned by Tencent is this to me, this is serious, I believe it’s serious. And I think, I think if I’m, if I’m an investor, I put my investor hat on almost always, if I’m an investor, and I’m like, trying to think, you know, should I put my dollars in gaming in the US, or put my dollars in gaming in China? And I think a lot of people can, you know, at least to me try and make the case that there’s so much opportunity in China, and I’m not that I disagree. I just think you run into issues like this that you would never have in the US. And that you can’t control for that as an investor, you have absolutely no control over. And and I think it’s scary. I think it’s really scary.

Jeff Cohen 1:07:04
To Harken that point. I mean, not, again, to make this political at all, but look at what happened with DD, right. They just went public, and they got taken off the App Store in China, like literally the day after they went public stocks down like 30%. So yeah, just that point.

Paul Dawalibi 1:07:22
It’s a good point. And I think, you know, it’s one of these things where, not not much, not much you can do other than see how this plays out, right? Like it’s either it’s either gonna, they’re either gonna hold the line here, and it becomes just part of the environment there. Or to Williams point and Lindsay’s point, maybe it doesn’t work. Maybe it’s unenforceable, and they give up on it. But I think I think it’s an interesting development and one to watch closely.