The Anti-Game Industry: How Fear Fuels Profit in China’s Gaming Market

The first sign that something was terribly wrong for Ah Sheng, an 18-year-old entrepreneur who was successfully running his own online store, was the click of the lock. His parents had lured him into the car that morning with a familiar story—a distant relative in Linyi was gravely ill, and they had to go pay their respects. But the “hospital room” they led him to felt strange, filled with unfamiliar faces. As his parents slipped out, the door shutting firmly behind them, Ah Sheng’s stomach dropped. The walls were plastered with posters about internet addiction. He had been tricked. When he turned to flee, strong hands grabbed him. A man in a white coat, whom everyone called “Uncle Yang,” entered the room, and the nightmare began.¹

At that very moment, halfway across the world, millions of players were celebrating the release of a new character in Genshin Impact, a gorgeously rendered fantasy game. They were exploring the virtual nation of Liyue, a world steeped in Chinese aesthetics, from its mountain landscapes to its opera music. The game, developed by the Shanghai-based company miHoYo, was being hailed by Chinese state media as a triumph of cultural export, a shining example of the nation’s burgeoning soft power.²

These two realities—a teenager being forcibly subjected to electroshock in a provincial hospital for the “crime” of being online, and a state-championed, globally dominant video game industry—are not contradictory. They are two sides of the same, uniquely Chinese coin. They are the product and byproduct of a two-decade-long moral panic that has itself been commercialized. The war on video games in China is not just a social phenomenon or a matter of government policy; it has spawned a lucrative, parallel economy. This is the story of the “anti-game” industry, an ecosystem that profits from parental anxiety, regulatory ambiguity, and the modern attention economy, all while the state simultaneously champions gaming as a pillar of its digital future.

This parasitic industry feeds on the very success of the mainstream gaming world. The more China’s game market grows—and it is colossal, with revenues of over 3029 billion RMB in 2023 and 668 million players—the more ubiquitous gaming becomes.⁴ This ubiquity, combined with deep-seated cultural anxieties about academic performance and single-child pressure, creates a vast, fertile market of fearful parents.⁵ And where there is fear, there is profit. Entities ranging from brutal boot camps like the one that ensnared Ah Sheng to modern social media influencers have built business models dedicated to selling a “cure” for the “disease” of gaming.⁷ The more successful China’s gaming sector becomes, the larger the potential market for the industry built on its demonization.

Part I: The Genesis of a Moral Panic: Forging “Spiritual Opium”

The Original Sin: “Electronic Heroin”

The moral panic that would define a generation’s relationship with gaming can be traced back to a single, explosive article. On May 9, 2000, the Guangming Daily, a prominent state-run newspaper, published a piece titled, “Computer Games: Aiming for the Children’s ‘Electronic Heroin’”.⁹

For an American audience, the term “heroin” is shocking enough. But in China, the phrase, and its later evolution into “spiritual opium” (精神鸦片), carries the crushing weight of historical trauma.¹⁰ “Opium” (鸦片) is not just a word for a drug; it is a direct reference to the Opium Wars of the 19th century and the beginning of what Chinese history calls the “Century of Humiliation,” a period of foreign invasion, colonial subjugation, and national weakness. To label video games “spiritual opium” was a deliberate and powerful act of framing. It cast them not as a new form of entertainment, but as a foreign, digital poison designed to addict and weaken China’s youth, just as British opium had done to their ancestors.

The article itself was a masterclass in hysteria, built on anecdote rather than fact. It famously quoted a game room owner who claimed, with zero evidence, that boys who frequented his establishment would inevitably become “robbers and thieves,” while the girls would become prostitutes.⁹ This was the spark that lit the fire. The narrative was simple, terrifying, and perfectly tailored to a society grappling with rapid economic change and the unfamiliar anxieties of the digital age.

The government’s reaction was swift and decisive. In June 2000, just a month after the article, several ministries jointly issued a notice that effectively banned the manufacture and sale of all video game consoles in China.⁹ The Great Wall of Consoles had been erected. This ban, which would last for 14 years, had a profound and paradoxical effect. It did not stop Chinese youth from playing games; it simply changed

how and what they played.

Cut off from the finite, often single-player experiences offered by consoles like the Sony PlayStation 2—which, in a stroke of historical irony, was released globally that same year—a generation of gamers was pushed into the grey-market world of PC gaming cafes, known as wangba (网吧).⁹ These dimly lit rooms, filled with rows of computers, quickly became the epicenter of youth gaming culture. And because they operated on an hourly fee basis, the dominant games were not those with clear endings, but massively multiplayer online role-playing games (MMORPGs), many imported from South Korea. Titles like

Legend of Mir and Mu Online were designed to be endless, encouraging players to spend hundreds, if not thousands, of hours “grinding” for better equipment.¹¹ The console ban, intended to curb addiction, had inadvertently created the perfect breeding ground for game mechanics that prioritized continuous engagement over narrative completion. It channeled an entire generation toward a model of gaming that was, by its very design, more susceptible to being labeled “addictive.”

Fertile Ground for Fear

This panic did not arise in a vacuum. It tapped into legitimate, pre-existing anxieties that haunt Chinese parents. The intense pressure of the gaokao, the national college entrance exam that can determine a child’s entire future, means that any activity not directly related to academic study is often viewed with deep suspicion. The one-child policy, which was in effect for decades, concentrated all of a family’s hopes and fears onto a single child, amplifying the stakes of their success or failure.

Furthermore, real health concerns were being linked to screen time. By 2020, reports indicated that over half of all children and adolescents in China suffered from myopia, a statistic that was frequently and directly blamed on excessive gaming and internet use.¹³ When an official Xinhua News Agency publication revived the “spiritual opium” label in a 2021 article, it was against this backdrop of deeply ingrained social fear. The article pointed to the growing consensus that online games were a societal harm, even as the industry itself was reporting massive growth, with sales revenue hitting 278.69 billion RMB in 2020, a 20.71% increase from the previous year.¹³ The stage was set for a bizarre and contradictory national drama.

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Table 1: A Timeline of Contradiction: China’s Dual Relationship with Gaming

Year	Stigmatization & Control	Legitimization & Promotion
2000	Guangming Daily calls games “electronic heroin”.9 Government bans video game consoles.9
2003		E-sports recognized as the 99th official sport by the State General Administration of Sport.14
2005	First official discussions of a “network game anti-addiction system” begin.12
2006	Yang Yongxin opens his “Internet Addiction Treatment Center” in Linyi.15
2008	State broadcaster CCTV airs War on Internet Demons, praising Yang Yongxin.16
2014		Government officially lifts the 14-year-old console ban.
2018		E-sports debuts as a demonstration sport at the Jakarta Asian Games.14
2019	World Health Organization includes “gaming disorder” in the ICD-11, providing a medical framework for the panic.17
2021	Xinhua-affiliated newspaper labels games “spiritual opium,” causing massive industry stock sell-offs.10 Government imposes strict time limits on minors’ gaming.	Chinese games like Genshin Impact achieve massive global success and are praised as cultural exports.2
2023		E-sports becomes an official medal event at the Hangzhou Asian Games, with the Chinese national team winning four gold medals.14
2024		State media celebrates the global launch of Black Myth: Wukong as a milestone for Chinese cultural influence.3

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Part II: The Boot Camp Business: A Market for Misery

The Devil in the White Coat: The Legend of Yang Yongxin and Room 13

If the moral panic was the disease, Yang Yongxin offered the cure. And for a time, he was hailed as a national hero for it. He was not some back-alley quack. He was the deputy director of the Linyi City Fourth People’s Hospital, a state-run mental health facility in Shandong province. He was a licensed psychiatrist, a member of the Communist Party, and a recipient of a special government allowance from the State Council, one of China’s highest honors for experts.⁷ This official legitimacy was the bedrock of his power.

In 2008, a seven-part documentary series on the state broadcaster CCTV, titled Zhan Wang Mo (《战网魔》, or War on Internet Demons), catapulted him to fame. The series portrayed him as a savior, a compassionate “Uncle Yang” rescuing troubled teens from the clutches of internet addiction.¹⁵ Desperate parents from across the country, armed with stories of rebellious, game-obsessed children, flocked to his clinic, ready to pay handsomely for his miracle cure.²¹

The heart of his “treatment” took place in a room labeled “Behavioral Correction Therapy Office,” known to its inmates simply as Room 13. Here, Yang practiced what he called “low-frequency pulse therapy.” Survivor testimonies and investigative reports paint a horrifyingly different picture. It was electroconvulsive therapy (ECT), a serious medical procedure used for severe psychiatric disorders, but administered by Yang without anesthetic, on fully conscious teenagers, as a form of aversion therapy.¹

The process was a ritual of torment. Children were held down on a bed as wet electrodes were applied to their temples. Then came the electricity. One survivor described it as “two very fast vibrating hammers hitting your temples,” a pain so intense it was impossible to open your eyes.¹⁶ As the child convulsed, Yang would conduct a psychological interrogation: “Why did you come here? Do you still dare to play games? Do you admit you are wrong?” The shocks would continue until the child broke, sobbing and pledging allegiance to Uncle Yang’s authority.¹⁶

This torture was merely the centerpiece of a comprehensive system of psychological domination. Life in the center was governed by a list of 86 arbitrary rules. Violating any of them, from “sitting in Uncle Yang’s chair” to “eating chocolate” to “locking the bathroom door,” could result in a trip to Room 13.²¹ More insidious were the vague infractions like “challenging Uncle Yang’s authority” or “having a serious attitude problem.” To enforce these rules, Yang created a totalitarian micro-society. He encouraged children to spy on and report each other, creating a climate of pervasive fear and destroying any bonds of trust. The ultimate goal was not medical healing but the complete destruction of a child’s will, followed by their re-education into a compliant, obedient subject.²¹

The Parental Contract: Outsourcing Obedience

The most unsettling question in this entire saga is: why would parents willingly subject their children to this? The answer lies in what the boot camps were truly selling. As one astute former inmate explained, the business of these centers was to “help parents produce xiàozi (孝子),” or filial, obedient children. The label “internet addiction” was merely the modern, socially acceptable justification for a much older demand: the enforcement of absolute parental authority.²¹

Many parents felt genuinely desperate. They saw their children becoming withdrawn, their grades slipping, and their authority eroding. They lacked the time, energy, or knowledge to bridge the generational and digital divide.¹⁶ Yang Yongxin, with his medical credentials and state-media endorsement, offered a simple, decisive, and seemingly scientific solution to a complex family crisis. He was a master at deflecting criticism. When challenged by journalist Chai Jing in a now-famous 2009 interview about his methods, he would turn the question back on the critic: “The parents say they can’t connect with their child. Do you have a better method?”.¹⁶ For parents who felt they had exhausted all other options, this logic was powerful. They were not buying healthcare; they were outsourcing discipline.

An Unregulated, Lucrative Industry

Yang Yongxin was the most famous, but he was far from the only one. He inspired a nationwide industry of similar “special training schools” and “internet addiction boot camps.” These institutions thrived in a legal grey zone. To this day, there is no official business category for “internet addiction treatment” in China’s corporate registration system.²² This allows them to operate without the stringent oversight required of medical facilities or educational institutions, often registering as vague “consulting” or “training” centers.

While precise market size figures are impossible to come by, the potential is enormous. In the late 2000s and early 2010s, various reports, likely inflated by the moral panic, estimated that China had anywhere from 4 million to 40 million “internet-addicted youth”.²³ Consider this in the context of China’s broader private education market. Before the government crackdown in 2021, the K-12 after-school tutoring industry was a behemoth, with a market size estimated at over 800 billion RMB (roughly $120 billion) in 2016.²⁵ The fees for Yang’s center were substantial. If even a tiny fraction of the parental spending power evident in the tutoring market was diverted by extreme fear into these unregulated boot camps, it would represent a multi-billion yuan industry built on misery.

Yang’s business model was a grotesque perversion of a medical-industrial complex. He leveraged his state-sanctioned authority as a doctor to pathologize what was often normal adolescent behavior. He then sold a non-medical product—coerced obedience—to a desperate consumer base of parents, using a pseudo-scientific justification. The fact that he remained employed at a public hospital for years after his methods were exposed, and was only reported to have “retired” in 2024, speaks volumes about the institutional inertia and deep societal demand that protected him and allowed his industry to flourish.⁷

Part III: The New Hustle: From Click-Shock to Clickbait

The era of high-profile, physically brutal boot camps like Yang Yongxin’s has largely faded, thanks to years of media scrutiny and public outrage. But the industry that profits from the stigma of gaming did not die. It evolved. It moved online, becoming more subtle, more scalable, and arguably more pervasive. The new product is no longer a “cure”; it’s the anxiety itself, packaged and sold for clicks.

The Attention Merchants of Anxiety

The new players in the stigma economy are the countless “self-media” (自媒体) accounts that populate China’s social media landscape, from Douyin (the Chinese version of TikTok) to WeChat. These are content farms, individual influencers, and small media companies whose business model is simple: generate traffic to sell ads or products. And in the crowded attention economy, nothing generates traffic quite like fear and outrage.

The tactics they employ are so common that the Cyberspace Administration of China (CAC), the country’s top internet regulator, has issued public notices specifically targeting them. These official documents provide a perfect playbook for the modern stigma industry ⁸:

• Fabrication and Sensationalism: They create “self-directed fakes,” staging videos of children having violent meltdowns over video games. They use “title-ticle” (标题党) headlines like “One Game, Three Generations Destroyed” to lure in viewers.
• Emotional Manipulation: They excel at what the CAC calls “creating ‘selling misery’ personas,” inventing heart-wrenching stories of families torn apart by gaming addiction to elicit sympathy, shares, and ultimately, engagement.
• Misleading Narratives: They “set topics with partiality,” taking an extreme, isolated incident and presenting it as a widespread social phenomenon, fueling a sense of crisis. This is a form of digital fear-mongering that the government itself labels “new yellow journalism”—low-quality, emotionally manipulative content that is high on sensation but devoid of facts.

This is the democratized, digital evolution of Yang Yongxin’s original media campaign. Instead of one state-sponsored documentary, there are now millions of short videos, articles, and posts, all reinforcing the same core message: video games are a danger, and you should be afraid.

The Parent Trap 2.0

To understand this business model, one only needs to look at its successful predecessor in China: the selling of educational anxiety. For years, commercial tutoring companies and educational influencers have perfected the art of cultivating parental fear to drive consumption.⁵ Chinese researchers have identified the precise mechanism: a three-step process of “scene reenactment -> risk rendering -> consumption guidance”.²⁸

First, an influencer shows a relatable, anxiety-inducing scene: a child struggling with math homework. Second, they render the risk: they declare that without their proprietary method, this child will fail the gaokao and be left behind in life’s brutal competition. Third, they provide the consumption guidance: a link to buy their online course, workbook, or one-on-one coaching session.

The anti-gaming content on social media follows this script to the letter. A video shows a teenager yelling at his mother for interrupting his game (scene). The voiceover gravely warns that this is a sign of “spiritual opium” addiction that will lead to academic failure and social alienation (risk). The video then ends with a call to follow the account for more “parenting tips” or a link to an e-commerce page selling anything from parenting books to, in a final twist of irony, ad placements for other mobile apps.

This represents a fundamental shift in the stigma industry. The old model, perfected by Yang Yongxin, was service-based: it sold a costly, one-time “cure” to a relatively small number of desperate parents. It was centralized, physical, and legally dubious, making it a clear target for investigative journalists. The new model is media-based. It is decentralized, digital, and operates in the murky ethical grey area of online speech. There is no single Room 13 to expose; there are millions of servers pumping out anxiety-inducing content. The product is no longer the “cure” but a continuous, low-cost stream of the anxiety itself, and the monetization is indirect, through ads and e-commerce. While less physically brutal, this new industry is arguably more effective at perpetuating the core stigma on a societal level, ensuring that the background radiation of fear remains high and, most importantly, continuously profitable.

Part IV: The Great Contradiction: A Nation at Play

While one industry profits from demonizing games, another, far larger industry has been forced to navigate the fallout. China’s tech giants have found themselves caught between the immense commercial potential of the world’s largest gaming market and the intense regulatory pressure born from the moral panic. Their solution has been a grand, costly bargain with the state.

The Great Firewall of Fun: Big Tech’s Costly Defense

In response to government mandates, companies like Tencent and NetEase have built the most sophisticated and restrictive “anti-addiction” systems for minors on the planet.²⁹ This is not a simple parental control toggle; it is a multi-layered fortress of technology, a form of corporate social responsibility that is, in reality, a non-negotiable cost of doing business.²⁹

The system is built on a foundation of real-name registration. Every single game account in China must be tied to a citizen’s national ID number and real name, which is verified against a central police database. This allows the system to know the exact age of every player.²⁹ For users identified as minors (under 18), draconian limits automatically kick in. Gameplay is restricted to just one hour, from 8 PM to 9 PM, only on Fridays, Saturdays, Sundays, and official public holidays. At 9 PM sharp, they are forcibly kicked from the game.³⁰ Spending is also strictly capped. Children under 12 are banned from making any in-game purchases, while older teens have small monthly limits.²⁹

To prevent children from simply using their parents’ IDs to bypass the system, companies have deployed a final, formidable layer of defense: facial recognition. At suspicious times, such as late at night, or for accounts flagged for unusual behavior, the game can trigger a pop-up demanding an immediate facial scan. If the face in front of the camera does not match the adult registered to the ID, the player is booted.³⁰ This entire apparatus represents a massive, ongoing technical and financial investment—a “social stability tax” the industry must pay to be allowed to operate.

Digital Champions: Gaming as National Glory

At the same time the state is forcing companies to build this digital panopticon, it is also enthusiastically promoting gaming as a key strategic industry. The economic argument is undeniable. The Chinese domestic game market is a pillar of the digital economy, generating over 325.7 billion RMB (about $48 billion) in revenue in 2024 and employing hundreds of thousands in high-tech jobs.³¹

More importantly, in recent years, Beijing has come to see gaming as a powerful vehicle for “cultural export” and projecting national soft power. Government policies explicitly encourage and support game companies “going overseas” (游戏出海) as part of a national strategy to build a “Cultural Strong Country” (文化强国).³³ Games like

Genshin Impact are lauded in state media for their beautiful integration of Chinese mythology, music, and aesthetics, effectively serving as interactive cultural ambassadors to a global audience of millions.² The highly anticipated 2024 release of

Black Myth: Wukong, a stunning action game based on the classic novel Journey to the West, was treated as a national cultural event, celebrated for its potential to share a core Chinese story with the world.³

The ultimate symbol of this legitimation came in 2023 at the Hangzhou Asian Games. For the first time, e-sports was included as an official medal event. The image of Chinese players, draped in the national flag, standing on a podium to receive gold medals for playing games like League of Legends and Dota 2—products from companies like Tencent and Perfect World—was broadcast across the nation.¹⁴ It was the ultimate, state-sanctioned refutation of the “spiritual opium” narrative.

This reveals the grand bargain at the heart of China’s relationship with gaming. The state’s approach is not simply contradictory; it is a calculated strategy of co-optation. It tolerates the industry’s massive domestic market and promotes its international success. In return, the industry must internalize the costs of social control by building and maintaining the elaborate anti-addiction systems. Furthermore, it must align its products with nationalistic goals, producing games that positively represent Chinese culture on the world stage. The industry absorbs the financial and operational costs of the domestic moral panic in exchange for the state’s blessing to expand and conquer globally.

Conclusion: The End of the Game?

The story of video games in China is a story of a nation grappling with modernity, control, and the untamable power of a new cultural force. The “stigma industry” and the legitimate “gaming industry” are not simple opposites. They are locked in a bizarre, symbiotic dance. The fear-mongers need the games to exist to have something to demonize. The game companies, in turn, have had their entire corporate strategy and product design shaped by the need to appease the fear-mongers and their powerful political backers. It is a uniquely Chinese model, born from the friction between authoritarian control and runaway capitalist dynamism.

This is not a victimless conflict. The profits of the stigma industry, whether they flow to the operators of brutal boot camps or the creators of viral clickbait, are built on real human suffering. They are extracted from the trauma of children like Ah Sheng, who was subjected to torment in the name of “treatment,” and from the desperation of parents, manipulated by a system that preys on their deepest anxieties.

The question that remains is whether this cycle can be broken. The generation that grew up with the “electronic heroin” narrative is now giving way to a new generation of parents and policymakers who are digital natives, for whom gaming is as normal as television or books were to their predecessors. Will they finally reject the “spiritual opium” label as the relic of a bygone panic? Or will the fundamental anxieties that fuel the stigma industry—the relentless academic competition, the deep-seated desire for social control, the timeless fears of parents for their children’s future—simply find a new, more convenient scapegoat? The game itself may change, but the profitable business of fear has proven to be remarkably adaptable and resilient. It is a game that is likely to continue for a long time to come.

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