The Chinese Press and Publication Authority announced its approval of 105 new online games, indicating that it fully supports the industry after proposed restrictions caused massive losses for investors in major gaming companies.
The New Approvals Boost the Online Gaming Industry
The National Press and Publication Administration issued a statement on its WeChat social media account on Monday, stating that the approvals granted by the Game Working Committee of the China Music and Digital Association are “positive signals supporting the healthy prosperity and development of the online gaming industry.”
Approved Games and the Impact of Proposed Restrictions
Among the approved games were “Counter War: Future” from Tencent and “Firefly Assault” from NetEase.
The proposed guidelines for restrictions on online gaming led to a decline in the stock prices of video game companies like Tencent and NetEase on Friday, resulting in losses of hundreds of billions of dollars and dragging down Chinese indices.
The Proposed Restrictions and Their Impact on the Industry
The guidelines for online gaming restrictions stipulate the prohibition of incentives for daily logins or purchases, as well as limit the amount of user top-ups and issue warnings regarding “irrational consumption behavior.”
The Impact on Companies and Financial Markets
On Friday, NetEase’s shares listed on Nasdaq fell by 16.1%, while its shares listed in Hong Kong declined by 25%. Tencent’s shares closed down by 12%. Huya Inc., a smaller online gaming company, lost 10.7% on the New York Stock Exchange. Overall, companies lost hundreds of billions of dollars in market value.
Evolution of the Online Gaming Industry in China
The Press and Publication Administration noted that in 2023, 1,075 game release numbers were issued, of which 977 were domestically produced and 98 were imported.
It also pointed out the “2023 China Gaming Industry Report,” which shows that the revenue from the local online gaming market exceeded 300 billion yuan (42 billion dollars) in 2023, with the number of people playing games reaching 668 million.
The “Game Working Committee” expressed hope that member units will take this opportunity to launch more high-quality products, promote high-quality development of the online gaming industry, and contribute to enhancing cultural prosperity, development, and building a culturally strong nation.
Measures Taken Against the Online Gaming Sector in China
China has taken various measures against the online gaming sector in recent years.
In 2021, regulators restricted the amount of time children could spend on games to only three hours per week, expressing concerns about video game addiction. Approvals for new video games were suspended for about eight months but resumed in April 2022 after a broader campaign on the entire technology industry was relaxed.
Source: https://apnews.com/article/china-online-games-video-approvals-62015fa20b129e77bd737bf1f93c26bb
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