On Monday, China granted approval for 105 domestic games, signaling a potential shift in its approach following recent industry restrictions that resulted in an $80 billion market decline last week.
Among the approved titles are games operated by Tencent Holdings and NetEase, China’s leading game publishers, which have been significantly impacted by Beijing’s recent regulatory measures. The approval of these games underscores Chinese authorities’ support for the development of the online gaming industry, according to an industry association post on WeChat, republished by the official Xinhua news agency.
Top gaming regulator, announced new rules on Friday aimed at curbing the development of online games
This move comes in the wake of heightened concerns after the National Press and Publication Administration, the top gaming regulator, announced new rules on Friday aimed at curbing the development of online games. These rules include an unspecified spending cap for adult players, a ban on rewards for frequent log-ins, forced player duels, and a prohibition on content deemed to violate national security.
Despite the NPPA’s approval of 40 imported gaming titles, including those operated by Tencent and NetEase, on the same day their market values plummeted in Hong Kong, investor confidence remained low. Analysts, including those from Citi, had initially suggested that Tencent and NetEase might not be significantly affected by the new restrictions. However, this failed to prevent a decline in the shares of both companies in US trading.
In response to the industry’s concerns, the NPPA stated on Saturday that it would take feedback from stakeholders, including companies and players, into account to refine the rules. The unexpected and comprehensive nature of these restrictions, announced on the last trading day before Christmas, reminded many of the extensive tech sector crackdown in 2021. During that period, various agencies imposed abrupt restrictions on sectors ranging from e-commerce to entertainment, impacting companies like Jack Ma-backed Ant Group and Alibaba Group Holding, while also disrupting the online education industry.
Yang Wenfeng, a senior vice president with Shanghai-based games studio Paper Games, commented on the recent events, stating, “The latest events reflect the government’s desire for a larger, more diverse gaming landscape with innovative content of higher quality but one without excessive monetization or ‘pay-to-win’ games. The government prefers publishers to earn profits through fair practices and product innovation, rather than deepening monetization strategies.”