Published , by TJ Denzer
Published , by TJ Denzer
China went through a very intense time over the holidays when a new set of rules set to be imposed on the gaming industry caused stocks of several major companies to plummet. This caused a panic which has since caused the Chinese government to reconsider its rules. Reportedly, not only has China softened its restrictions, but a key official behind the strict rules has been removed.
China’s reversal of its latest strict regulations on gaming were recently reported by Reuters. The latest regulations out of China would have put new monetary restrictions on the gaming industry. Daily login bonuses, spending limits, and other restrictions were put forth that would heavily inhibit monetization, especially in the mobile gaming market. This caused Tencent stock to drop 12 percent in value and NetEase shares took a 25 percent dip. The reversal of some of these restrictions has caused the two to recover a bit, but only by 5 percent and 10 percent respectively.
Notably, Reuters claims that several sources confirmed a key official in the implementation of the restrictions has been pushed out of power. Feng Shixin was a head of the Chinese Communist Party’s Publicity Department that oversees rules and restrictions on the gaming industry. Shixin personally led several previous restriction implementations on gaming within the nation, and while his removal has not been made official, multiple sources claimed it occurred in direct relation to the stock plummet.
With China’s restrictions softened for the time being, it will remain to be seen if its companies can regain ground lost during the end of 2023. Stay tuned as we watch for further updates on this story.