China is making a 180 turn around on the gaming curb it made Friday, saying that the authorities may revise the newly drafted online gaming rules following a $80 billion rout in market value from two biggest gaming companies in China.
It was reported that on Monday, China approved 105 domestic online games for December, according to China’s press and publication administration. Games from two of the big gaming companies Tencent and NetEase were among the approved lists. The number of approvals is the highest since August 2022.
Beijing released a draft on Friday with a wide range of regulations and restrictions aimed at curbing online spending and rewards in video games, such as log-in rewards or first-time-spending rewards.
More importantly, gacha features, a probability-based draw system, which is very popular and could lead to tens to thousands of dollars being spent are also banned for minors, which sent an immediate impact to the gaming industry as seen in the stock market.
The share price of Hong Kong listed-company Tencent Holdings was down 12.4% at the closing on Friday, while NetEase Inc fell 24.6%. They are two of the largest companies in the industry and their performance along with the others dragged the Hang Seng Index down by 1.7%. US-listed NetEase shares were also down more than 23% in pre-market trade and closed 16% lower on Friday.
CCTV reported that regulators have heard the concerns and opinions raised by all related parties. They added that they will do more research and revise the draft. It was reported that the wording of sections in the draft regarding the rewards could be changed.
The crackdown on gaming industry by Chinese authorities began in 2021 when Beijing announced a new rule to limit play time of kids under 18 years old and suspended approvals of new games for about eight months. The government said that it was concerned about gaming addiction and the learning ability of their youth.
