GigaOM

Chinese state officials are reportedly planning to issue new rules to combat “undesirable” elements associated with online gaming. It’s just the latest mixed message coming out of the country’s government with regards to this market.

Online gaming is extremely popular in China; the country accounts for nearly half of World of Warcraft’s subscriber base of nine million, while a few local MMOs, like Westward Journey, may boast even more users. This activity does provoke constant bursts of regulatory intrusion from the Chinese government, such as issuing warnings about the use of virtual currency, forcing game publishers to install time-restrictive crippleware to prevent “addiction,” and as the Reuters story notes, making frequent sweeps to shut down unauthorized Internet cafes. (When I visited the country last fall, I was surprised at the lack of once-ubiquitous gaming cafes; Chinese friends told me they were shuttered in anticipation of the next big Party meeting, as a public show of cultural cleansing.)

However, all this contributes to a mixed message, because the Chinese government itself is a major investor in online games. As I noted last November, it’s deeply involved in “the China Recreation District,” (pictured above) a public/private partnership that’s currently building a 40-square-mile office/recreational park in Beijing devoted to online worlds. HiPiHi, a sort of Chinese version of Second Life, is one of the country’s most prominent Internet startups. Reuters’ report leaves the impression that the government is a monolithic entity uniformly opposed to online games. As with most things they’re involved in, however, the reality is clearly more complex, with different Party factions jostling with each other for a stake in one of the country’s leading industries — and its identity.