The Ministry of Culture has pledged to ensure "healthy" content of videogames and to attract older people to gaming, following this summer's lifting of a national ban on games consoles and arcades.
Though China holds opportunities for games companies, the industry lacks innovation and promotion here, according to a statement released by the ministry after a gaming industry conference in Beijing on Sunday.
"Game content should be healthy and not cross the red line," said the statement, adding that arcades should be light and spacious. It did not elaborate on what it meant by "healthy", but authorities often block the release of games deemed too violent or pornographic.
The ministry said games should be designed for different age groups, not only serving teenagers.
China has long feared that games and related problems such as gambling could have adverse effects on young people.
The ministry only lifted its ban on making and selling games consoles in June, finally giving Sony's Playstation 4 and Microsoft's Xbox One the chance to compete with PC games.
Chinese companies are expanding their presence in the gaming market, with Tencent holding large stakes in big foreign players such as Activision Blizzard, developer of "Call of Duty" and "World of Warcraft."
According to iResearch.cn, China's online gaming market (online games on PC and mobile devices) was worth 110.8 billion yuan (17.3 billion U.S. dollars) in 2014.
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