(I) Tencent Anti-Corruption Update: Over 90 Employees Dismissed, More Than 20 Transferred to Public Security Authorities
On January 23, the official “Sunshine Tencent” public account disclosed Tencent Group’s 2025 anti-fraud investigation results.
Throughout 2025, Tencent’s Anti-Fraud Investigation Department handled more than 70 cases involving violations of the company’s “high-pressure red line,” resulting in the dismissal of over 90 employees.
Among them, more than 20 individuals suspected of criminal offenses were transferred to public security authorities, and over 30 external individuals involved in the cases were also arrested. Employees found in violation were dismissed, placed on a blacklist, and permanently barred from re-employment within Tencent.
The announcement disclosed 19 cases that had already been adjudicated. The unlawful conduct included illegal appropriation of company assets, seeking benefits for external companies or individuals in exchange for kickbacks, and theft of company property.
In addition, Tencent published a list of 15 entities with which it will permanently cease cooperation, covering sectors such as cultural media and film, public relations marketing and consulting, technology and IT services, and general trade and retail.
Norconn Commentary:
Based on the adjudicated cases disclosed, positions facing enterprise clients (B-end clients) and roles possessing “resource allocation authority,” “vendor management authority,” and “asset disposal authority” in middle-office and operational departments present the highest compliance risks.
This serves as a warning for game companies in anti-fraud management:
B-end sales and procurement positions must strictly adhere to compliance red lines and avoid forming improper interest ties with suppliers.
Resource operation roles must standardize allocation procedures to prevent rent-seeking.
Internal audit and risk control mechanisms should be conducted regularly to promptly identify attempts to misappropriate company interests or engage in benefit transfers.
(II) Using Fishing Games for Account Leasing and Cash-Out: Silver Merchant Convicted of Operating a Casino
Beginning in early 2023, defendants Kong and Fang and others attracted traffic by posting advertisements in livestream rooms such as “account rental for monster fights,” “equipment recycling,” and “instant withdrawal upon cash-out,” and organized gambling activities by exploiting probability mechanisms within a legitimate fishing game.
The criminal group stockpiled large quantities of game accounts and rented them to players at specified exchange ratios (for example, RMB 40 for 1 million “bullet” items). Players consumed “bullets” in-game to challenge bosses, with win or loss determined by the probability mechanism of random item drops. The group ultimately realized virtual item-to-cash settlement by “recycling accounts.”
Investigation further revealed that the group’s profit model essentially relied on earning spreads through high-frequency item trading (collecting rake fees), rather than directly appropriating players’ principal funds. Large volumes of recharge and recycling cycles were reflected in the capital flow.
In November 2025, the Putuo District People’s Procuratorate of Shanghai prosecuted Kong, Fang, and others for the crime of operating a casino.
The procuratorate pointed out that although the capital flow involved was substantial, determination of “serious circumstances” should comprehensively consider the actual rake profit amount, number of participants, and duration. Upon calculation, the illegal profit in this case did not meet the statutory threshold for “serious circumstances.” In December 2025, the court adopted the prosecution’s charges and sentenced Kong and Fang to two years’ imprisonment each for the crime of operating a casino, along with fines of RMB 20,000.
Norconn Commentary:
This case is a typical example of “using a legitimate fishing game to operate an online casino.” The game itself did not involve gambling, but the external group exploited its “random bullet drop” probability mechanism to construct a complete operational model of account leasing, item recycling, and cash settlement. The officially non-tradable “bullet” items were transformed into gambling “chips,” thereby realizing gambling activities.
The prosecution identified three elements constituting the crime of operating a casino: first, player returns were entirely determined by probability, possessing gambling characteristics; second, the group established a settlement channel converting bullets into real money, essentially functioning as casino chip exchange; third, the group publicly solicited a large number of players online, demonstrating operational and public characteristics.
Game enterprises should strictly regulate gray areas such as item recycling and account leasing to prevent disguised cash conversion combined with random gameplay mechanisms from transforming lawful entertainment into online gambling.
(III) AI Company “Nature Select” Completes New Financing Round Exceeding USD 30 Million
Recently, the AI enterprise “Nature Select,” invested in by Kingnet Network, announced completion of a new financing round exceeding USD 30 million. Investors in this round include Alibaba, Ant Group, Qiming Venture Partners, and 5Y Capital. Following the financing, Kingnet Network remains the largest institutional investor outside of the founding team.
Nature Select’s core product, EVE, focuses on the AI companionship sector and positions itself as “the world’s first 3D AI intelligent companionship application.”
Norconn Commentary:
Currently, AI companionship products must address not only traditional legal issues such as data compliance and content compliance, but also numerous emerging technological ethics challenges. In particular, AI companionship products emphasizing realistic interaction may blur the boundary between reality and virtuality, creating risks of excessive immersion in the virtual world.
In response, the Interim Measures for the Administration of Anthropomorphic AI Interactive Services (Draft for Comments) sets forth targeted regulatory requirements, clarifying that service providers bear primary responsibility for delineating the boundary between virtual and real. This includes but is not limited to:
Anthropomorphic interaction services must undergo technology ethics review and must not be designed to replace social interaction, control user psychology, or induce addiction or dependence.
Providers must prominently inform users that they are interacting with artificial intelligence rather than a natural person. When providers identify excessive dependence or addiction tendencies, or upon initial use or re-login, dynamic pop-up reminders must inform users that interaction content is AI-generated.
Where a user continuously uses anthropomorphic interaction services for more than two hours, providers must dynamically remind users via pop-ups to suspend usage.
Although the above provisions are still in draft form and not yet in force, they clearly outline the core future compliance direction for AI companionship services.
(IV) Steam Revenue Share Model Challenged Again: Valve Faces GBP 656 Million Class Action in the UK
The UK video game market has recently seen significant progress in a highly watched class action lawsuit. The Competition Appeal Tribunal (CAT) in London ruled that a collective claim against Valve, a well-known game publisher and platform operator, may proceed. The claim seeks damages of GBP 656 million (approximately RMB 6.24 billion) and is regarded as one of the largest consumer lawsuits against digital platforms in recent years.
The case was initially filed in 2024 by children’s welfare advocate Vicki Shotbolt as representative claimant, on behalf of approximately 14 million UK consumers who have purchased PC games and related add-on content via Steam or other channels since 2018. The claim alleges that Valve abused its dominant position in the PC digital game distribution market through unfair commercial arrangements that inflated game prices and harmed consumer interests.
Specifically, the lawsuit alleges that Valve charges publishers platform commissions of up to 30%, and through contractual terms or platform rules restricts publishers from selling the same games and DLC at lower prices or earlier release dates on competing platforms. In addition, it is alleged that once users purchase a base game on Steam, related add-on content must continue to be purchased via Steam, thereby “locking in” consumers within its ecosystem and weakening market competition.
Valve denied the allegations and argued that the case should not be granted collective action status. However, the Competition Appeal Tribunal ultimately ruled that the case meets the criteria to proceed, rejecting Valve’s request to block substantive proceedings. Valve has not publicly responded to the ruling as of this writing.
Norconn Commentary:
Unlike traditional antitrust investigations led by regulatory authorities, this case adopts a consumer class action approach directly targeting platform commissions, price restrictions, and ecosystem lock-in practices. This means that even absent regulatory penalties, platforms may still face substantial civil compensation exposure, significantly increasing legal uncertainty.
The core issue is not merely Steam’s commission rate, but the combination of three alleged elements:
Restrictions on cross-platform price reductions or early releases;
Mandatory platform binding of DLC and base games;
Leveraging market dominance to weaken competition.
This structural combination of “commission + exclusivity/lock-in mechanisms” is increasingly viewed by UK and EU courts as potentially constituting abuse of market dominance.
The impact of this case on PC gaming platforms may be comparable to litigation faced by Apple and Google in the mobile sector. It demonstrates that once a platform achieves de facto dominance within a specific market segment, it may be subject to strict competition law scrutiny.
For game companies expanding overseas—whether operating self-built platforms, acting as publishing platforms, or cooperating with overseas platforms—it is necessary to reassess:
1. Whether there exist most-favored-nation clauses, platform exclusivity, or de facto exclusionary terms;
2. Whether DLC, items, or subscriptions are forcibly locked into a single platform;
3. Whether contracts or actual practices restrict developer or consumer choice.
