The raid on the Shenzhen offices of Kuaibo on April 22 was regarded as an initiative by the government to get tough on copyright infringement. However, news of the police raid has sent shockwaves through the Chinese online video game industry as rumors swirl of a “obscenity ban“, iQiLu reported.

The rumored ban would prohibit video game companies from using licentious material in any of its advertising. Apparently a notice has already been sent to game companies that says video game advertisements that expose sensitive body parts through the use of short sleeves, shorts, skirts, and bathing suits are prohibited. Any physical contact between men and women characters are forbidden, though its not sure how violence is covered under these rules.

The rumors true or not, yesterday saw a downward trend in the stock market for just about every Chinese online gaming company. Shares plummeted for video game companies like OurPalm, Shunwang Technology, and Aisidi.

Besides its reputation as a notorious pirate that rebroadcast unlicensed material, Kuaidi is well-known for its racy video game advertisements.  An unnamed industry insider likens the investigation to an “attack” and gave this analysis:

What can most attract traffic on the internet is lascivious material. Reading material and news can not compare with this. Because of its individual characteristics, it was very easy for Kuaibo to attract online gaming companies to purchase advertising on its streaming products.

The fear is resonated by this representative of an unidentified Beijing-based online video game company:

The investigation of Kuaibo is a signal. During this initiative, will they continue to investigate other promotional avenues of the online gaming industry? What’s next, investigating the content of online games themselves?

For its part, Kuaidi has admitted that police visited their offices, but denies that any arrests were made. The company is adamant that is has resumed normal operations.

The government initiative to police the Chinese internet of obscene and copyright infringement began earlier this month.

Despite its effect upon the industry, Caijing reported the rumored ban as false, confirming that there is no such ban after contacting several video game companies.

Between this and the prostitution crackdown in Dongguan that continues to plague the city’s economy, we can only hope that adhering to moral principles doesn’t have a detrimental effect upon China’s economic prosperity.

Photo: 55g, kaifu