 Welcome to the wide world of e-sports, a show devoted to all things e-sports. I'm your host, Catherine Norr. Today, we're talking about China's policies on gaming. And my guest is Brendan Busman, Partner and Director of Government Affairs at Global Market Advisors. Welcome, Brendan. Thank you, pleasure to be with you today. So what does global market advisors do? So we are a consulting firm that specializes in the gaming, entertainment, sports, and hospitality sectors. And we've done work all around the globe, other than probably Antarctica is probably the only continent we haven't done anything on, but host to different projects around the globe. Obviously that's been curtailed a little bit by this wonderful thing called the pandemic, but look to, you know, reignite some of those relationships, and especially those in Asia, hopefully in 2022 when I can get back to traveling. All right. So tell us about China's new policies on gaming. Well, you know, the Chinese have always had, you know, a host of different policies, both on, and I'm gonna say this in two aspects, gaming and gambling, even though they're symbiotic in how they view the overall nature and it's, I'll use the word detriment to their society and causes an imbalance in the harmony that they suggest and strive for. Probably two months ago, they've started to curtail their policy or crafted, I think a little bit tighter. When first and foremost, they came out and said as relates to video gaming, that they were going to limit the ability for youth and really sort of anybody in that to make sure they can only do it during certain hours of the day and only during certain times of the week. And basically said, hey, you can do stuff on weekends and holidays, but the rest of it, you know, you're curtailed other than, you know, a limited time out there. And it also then goes to, and this has been one of the questions that has remained out there, which is, you know, what does this mean for game titles, control and aspects of various games along the way and how that may or may not, you know, curtail future development of these online games and everything else and children and teenagers, as they play these in the limited one hour they have on weekends and holidays. Thanks. You know, I would think that China is proud of their eSports culture and that they've, they're in their eSports business. I mean, they've actually built huge arenas for eSports. So how can they actually continue to have eSports competitions and athletes if they limit the players time playing? You know, that's a very good question. One that, you know, I sort of relate it to how they view gambling a little bit off of this as well, which is, you know, it's a mainstream portion of the income in places like Macau and the ability to, you know, reinvest in the social network down there. But then they take very distinct views as it makes it towards specifics to the general population to curtail these types of behaviors. You know, I think it's anybody's guess on how this completely shakes out over the course of time. But, you know, I think what they will probably end up doing is if they believe there is some individual that has a special talent with one of these games or overall within the eSports realm of this, they'll sort of segment them off and say, okay, we'll let you go above and beyond, you know, but for the general public we're putting these procedures in place. So very much of a controlled society type feel that one, you know, here in the United States we're not used to offer that, not just from the parameters of only allowing, you know, kids to partake in this for an hour out of their day, but, you know, segmenting off and saying, hey, you have a talent, we'll let you sort of step out of the fray and do these types of things. Sure, and I think that China has consistently done that with other, with traditional sports. And because I think when they identify talented children who are good at gymnastics or at other sports, they do that same thing, especially when it's an Olympic sport. Do you think that if eSports becomes an Olympic sport that that will impact their policies? I think it would have to. I think you can see, you know, looking at, you know, the latest summer Olympics that was obviously a later, a year later than was originally scheduled. And obviously with the upcoming winter Olympics they're hosting in Beijing here in three, four months, three months, I guess it is, you know, they always strive to be the best in these and continue to be excellent in every and all categories. So if eSports were to become an Olympic sport, and obviously I know there were some discussions off of that as it related to Japan that just got done hosting the summer Olympics, you know, a few months ago, I could see them wanting to and desiring to be the best in those and striving to do that and treating those just as you mentioned, like any other athlete out there, whether it's, you know, gymnastics, you know, or any other event. Sure, and what do you think is behind the policy to restrict gaming hours? You know, I think there's a couple of things that come to mind, you know, the one thing that continually gets swayed in the public eye off of this is the social harmony and the social balances they strive within society. And making sure that you, one, don't overindulge in things, keep things specific to what they believe, and I think that's one of the things that I think is really important is that they, being, you know, Xi Jinping and his realm that he has created and society that he desires as he continues to take more and more power within China for an ideal society. And I think they look at things that can be distractions that could take hours upon hours for general public, you know, to that harmony. So they're all about creating that balance along the way and that's why they put policies like this into place. Do you think the pandemic fueled this? Because I would think that as kids were spending more time at home, they were gaming more and that probably came to the attention of government. I'm sure there, I mean, there's a host of different things and, you know, you go back, as we were talking before the show started, how much things have changed over two years and policy-wise and being able to do that, that, you know, one, I think it was an opportunity to say, okay, what's really going on here? Because we can now focus on certain areas to say, are people gaming more? Are they doing X? Are they doing Y along the way to see what really is happening off of that? The other is because you've been able to curtail a lot of these behaviors and, you know, as it relates to the pandemic and there's zero tolerance policy, you're able to, you know, put people and say, look, you've got to stay at home, you've got to stay focused off of this so we can eliminate the virus, but that allows them to put in other procedures into place that allows them to dictate policies like this to say, look, we think our people are playing too much in video games and eSports and we don't want to see that happen. So this gives us an opportunity to do that because we have everybody sort of corraled and focused off of this and it's an opportunity to implement these policies that you maybe would have had a harder and a more challenging time to do, had that been in a normal everyday society that's running hustle bustle along the way. Sure. And across all over the world, eSports and gaming are used in education. For example, Minecraft is used exclusively and in colleges they have eSports programs, they even have such programs in Scholastic and, you know, at different levels and they use gaming to teach students. And then there's also college scholarships for eSports. So do they do that in China and would that be impactful and would that be impacted by the policy? You know, I think it could, let me say two things. One, yes, they do use those things to differentiate. It has been used in some aspects of a teaching tool, probably not as much to as extent as you see here with some of the things that going on in the United States with the various clubs, science activities, the college scholarships and that, but I think it goes back to what we were talking about earlier of if we believe a student can excel in this, that we will segment them off and put them into a different track. No different than you would a normal athlete, no different than, you know, someone even scholastically you would say to say, hey, here's somebody that has a deep passion and interest in chemistry and they seem to be doing leaps and bounds above everything else. So I think it's important to have a fast track to figure out some other thing that we need in that aspect. So it's very much to your point back to the root of your question. I think some of those things have probably been curtailed because it's not like, hey, go home and do your homework on Minecraft because it's a school tool. More, hey, we'll use it as we need to within the classroom. The Excel will take you off and put you on a separate track. Using that as an overall education tool isn't the way you and I would view it out of here in the United States. So how can a Chinese government even enforce this? Can't kids go home and play on their phone or play on a console? You know, I think there's probably some opportunities to go around that just as there is with everything in society and to be able to do that. Obviously, I haven't had, you know, from my daily activities, we always like to do site visits and actually witness people doing stuff. I haven't, as we talked earlier, I haven't been to Macau or Hong Kong since, you know, fall of 19. And the sad thing is I had a full trip in China planned right before the pandemic hit right as the pandemic was hitting. So unfortunately, that trip got canceled to be able to see that. But it'd be one that I'd love to be able to see what actually goes on and how do they or don't they get around that? You know, as it relates to other things that I've seen that I have witnessed in society as it relates to this, you can look at online gambling that has been, you know, something that mainland has found a way in some aspects to get around. But that has even been curtailed during the pandemic. You know, you look at pre-pandemic levels of online gaming and the rate that they were, you know, attracting Chinese customers. It was very high because they were figuring out ways to move money in and out of the country. Now that said, they've been able to limit that because central government has come in and tried to put various curtailing aspects of being able to transfer money and put other tracking mechanisms in, which I'm sure they've done off of these things as it relates to e-sports and gaming to verify that X, Y and Z. The other thing is just from a societal perspective. You know, it is very much wanting to be, you know, overall, at least on mainland, you know, in that good faith of what the government seeks. So you don't see, you know, a lot of rabble rousers like you would probably see here in the United States that, you know, would say, eh, screw it. I'll pull the plug. I'll play on my own and call it a day. And I'll try to get good behind the scenes. Not saying it doesn't happen. I'm just saying it probably doesn't happen as frequently. Sure. And then I wonder are they, in terms of enforcement, who would be punished? Would it be the child or the parent? You know, I think probably when push comes to shove, it's probably on the parent because there are ultimately the guardian that's supposed to enforce those things. But obviously, you know, if it's some 17 year old kid versus some 12 year old, that may probably come into play too. But, you know, that's, that's more, you know, making some assumptions along the way, just because, you know, this is a policy that just went into place, you know, a couple, three months ago. So we still see how it would be implemented. Not just implemented, but, but enacted. From an enforcement standpoint. Sure. And so are you, in your work, are you steering people away from certain investments or, you know, certain business activities because of the rule? You know, I think we have to look at it in a couple aspects of one that is still a, I mean, is still a large population of the world that cannot be, you know, just immediately turned off to say, hey, this market's limited and we just shouldn't care about it. You've got over a billion people there. So you can't ignore them over everything. But, you know, whether any of the four sectors that we do business in, I always, you know, sort of couch it going, you know, if you plan on working a lot with the Chinese or plan on Chinese guests and those types of things coming, you need to sort of have a measured response off of that to say, you know, what does my business look like with those set of customers? And what does my business look like without that set of customers? Because if they don't come back and they aren't able to do things outside of China over the course of time, you know, that that will be a factor and one that you need to consider out of the gate. You know, one thing that I will say as we talk about travel and those types of things overall, you know, China currently has that zero tolerance policy as it relates to COVID and they will shut down cities and regions if there is any level of a spike to make sure that they eliminate that. You know, if you were an area and dependent on eSports customers coming from China or participating in your contest and those types of things, I wouldn't necessarily plan on those people coming back anytime soon. Part of that is going to be contingent. I think that policy will remain in place at least until after the Olympics, which are in February because they want to make sure they have an exceptional event that they have there for the Winter Games in Beijing. So I think they're going to try to keep things as compact and tight as they possibly can. And I think then you'll see some loosening, but even then, you know, they've said that they want to make sure that, you know, as it relates to a social balance, you know, if there are areas where it could end up being harmful, they'll restrict access. Now, eSports and gaming does not just mean playing. It also means streaming. It means watching as well. And would the, do you know if the restriction encompasses only playing or does it encompass streaming is, I mean, do you know anything about the nuances of the definition? You know, I think I take much more of a strict view on what they do and don't allow off of this just because of that social balance. So, you know, I'm assuming at some point they probably start if you, if you aren't playing and you're not doing that, if all of a sudden you're watching twitch a heck of a lot more, or trying to over we chat and other things, you know, in their version of we chat 10 times different than the one we have and everything else, because they have so many more features off of that, that there, I'm sure that something would come down and say, hey, we need you to focus on X and ignore why type thing. I'd be shocked otherwise. You know, I've had a number of eSports coaches and gamer doc Sykes Sensei appear on my show and eSports pro athletes have a little bit broader at, you know, training than just playing and they work out, they do some other things, maybe they could do visualization or do some other things that might fall outside of playing in order to, you know, continue to improve. What do you think about that? You know, I think first and foremost, you know, if you look at, and I can say this from a sports perspective, you know, eSports programs today have sometimes all the same benefits as any professional other sport out there, whether it's football, basketball, everything else in between. It's about diet, it's about the mental aspects of sports. It's about, you know, various practice regiments, everything else along the way. And that's what you need to do to do it right. I always joke with somebody, you know, I spent a good portion of my early career specifically working within college athletics and I had one of our team psychologists that was very involved with NASCAR and I said, what are a bunch of guys that drive left for a living who need a team psychologist for? And, you know, he talked me through their whole aspect. I got the full two or everything else. I'm like, okay, my ignorant statement, I apologize off of that. But back to your question as it relates to eSports, you know, those are all very big components of those that train over everything. And I think it goes into the segments off of that. If they see a talent to be able to do that, they're going to make sure that you have the resources to be able to do that at the best of your ability. So they're going to allow, you know, the mental preparedness and mindset as well as being able to work out, eat healthy and all of those things to make, you know, you in a good position to move forward. You know, and that, you know, that's very interesting because when you think about a lot of sports, like if you think about swimming, they're going to swim a massive amount, quite a few hours a day in order to train. If you look at gymnasts, they spend many hours in the day, you know, they'll spend eight hours or more training. But if you look at track athletes or, you know, there's some athletes that have to minimize the number of hours that they actually do the actual sport. So I wonder if it's kind of possible to be at, you know, to gain the skills needed or to be at some level if there's a reduction of hours played. You know, I think it probably depends some on the athlete and what they need to make sure that works. And I look at that from the standpoint of, you know, the athletes I've worked with over the years, you have some that just have a tremendous talent that is God given in every way. And you're like, I wish I could have half of that and it just rolls and it's fluid and they don't have to work as hard. They have the metabolism, they have the mental aspects, all of those various things that matter. But to the same extent, you've got somebody that has the heart and soul and passion to be able to do it. And they got to work their tails off to get it done, you know, and those are the guys that, you know, and gals, I shouldn't say just guys, the athletes out there that, you know, like, hey, I've got to stay after her and, you know, be that track athlete that, you know, runs X amount more or that swimmer that needs to do at, you know, X more laps or dive or whatever else and stay behind because they need that extra level of mental prep. They need that extra level of athletic prep to be able to do that. So I think it's contingent upon the athlete more than anything. But, you know, as I always say, and in fact, I remember when I was working with somebody off of an athlete training center we were doing and they said, oh, we can instantaneously predict, you know, looking genetically at who's an athlete and who's not. And I said, I'm going to contradict you every day that ends and why, because I've seen enough people over the time that put heart and soul into it. And sometimes the people that have a lot of this and a lot of this will surpass the ones that have the automatic talent. Absolutely. Do you, you know, do you think other countries might follow suit and adopt similar policies? You know, I really don't see anything off of that right now looking at the geopolitical landscape. I mean, I shouldn't say that completely. Obviously, I think you have other totalitarian regimes such as North Korea and that that probably can put those things into place to be able to do that. But I think for most of the rest of the world, putting parameters off of that just doesn't seem realistic. I mean, they may put little things into tweak it, but really sort of controlling what happens in someone's home, you know, at least from a United States perspective and, you know, European and other things along the way. And I would even say most Asia that sort of like, hey, we're not going to curtail it to the type that China did, you know, along the way, we may put some guidelines in to say, hey, we don't think your kids should play more than X hours a day, but they're not going to come down in a very meaningful way and say, hey, you're limited to three hours a week and enjoy your time on weekends. Sure. And I think North Korea probably already has a protocol up place. Yeah, I was going to say, as I said that I'm like, I can think of one regime for sure that's probably already there, but you know. Yeah, I don't think they, they, you know, miss any regulation that they could possibly do. Yeah. Well, I think, I think to their neighbors real quick, if I just interject, you know, if you look at like Japan and South Korea, obviously that have, you know, also strong, you know, people that believe in eSports and have good programs, those countries aren't going to restrict that, you know, they just aren't. Sure, sure. And, you know, gaming is a huge ecosystem and it impacts careers. And do you think that this restriction will also alter that ecosystem for China? He could, you know, I think we have to see what happens with the larger geopolitical landscape of China and somewhat of its next steps. I mean, some of the actions you're seeing are very much trying to go to a close base society and sort of, you know, centralize that power a little bit more. While some of the rest of the world, and I think the thing we've learned over the last two years as we've been in the middle of this pandemic is how interconnected the world is and the types of things that we rely on along the way. And obviously China at this point holds a lot of those, those strings to make everything work, whether it be supply chain or raw materials or other things along the way from a workforce standpoint. So we have yet to see how that may or may not impact not just their society, but the global society as a whole. Are you able to say whether this policy is good or bad, or is it somewhere in between? From my perspective, it's not a good policy. I'm very much of a free market, you know, laissez-faire kind of guy that believes in open societies to be able to do what they feel is best and let's get those talents out. So, you know, that's my own personal view off of that. Obviously, I think, you know, there's people in the Chinese government that have a different view than I do on life. So. Sir, and I have to echo that. I totally agree with you and I would say that it's bad. But anyway, that's fine. We can have that opinion in the United States where we have a free market. So how can people find you if they're interested in your services? Well, you know, we'd love to talk to anything and, you know, any of the four sectors that we met that I talked about earlier in gaming, entertainment, sports and hospitality. Go to our website, which is globalmarketadvisors.com. Or you can also reach out to me directly on my email, which is bdb at globalmarketadvisors.com as well. Terrific. Well, I really appreciate you being on the show, Brendan. We've learned so much about China's policy. Thank you for having me. And I'd be welcome to come back anytime. This is a great program. Terrific. All right. Thank you to our viewers for joining us today. Make sure you tune in next week. My guest will be Ben Bueno of Beacons GG. See you then.