Chinese gaming stocks soar amid Beijing’s apparent U-turn on strict gaming regulations

Chinese gaming stocks soar amid Beijing’s apparent U-turn on strict gaming regulations
via Cavus Clemens

The proposed rules included limiting in-game purchases, restrictions on log-in rewards and the introduction of warnings

January 24, 2024
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Chinese gaming stocks soared after news that the country’s video game regulator had seemingly scrapped proposed rules aimed at curbing “obsessive” gaming.
Proposals cause slump: In Dec. 2023, China’s National Press and Publication Administration (NPPA) proposed stringent rules to curb excessive gaming, including limitations on in-game purchases, restrictions on daily log-in rewards and the introduction of pop-up warnings for “irrational” behavior. After the proposal, stock prices of Tencent Holdings and NetEase dove, with both gaming companies collectively losing nearly $80 billion in market value. 
Apparent regulatory reversal: The draft rules mysteriously vanished from the NPPA website on Tuesday, leading to a significant rebound in the stock prices of major Chinese gaming firms, reported Reuters.
Feng Shixin, a senior official at the Central Propaganda Department, was reportedly fired possibly due to his role in overseeing the NPPA. While the Chinese government has not officially confirmed his removal, insiders suggest a connection between Feng’s departure and the recent draft regulations on gaming. 
Uncertainty looms: China’s gaming industry has been under tight scrutiny, with 2021 marked by strict limits on children’s playtime and an eight-month freeze on new game approvals. This uncertain regulatory environment could fuel further overseas expansion by Chinese gaming companies, mirroring the trend seen in 2021 when giants like Tencent and NetEase invested in foreign markets like France, Japan and the U.S.
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      Ryan General

      Ryan General
      is a Senior Reporter for NextShark

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