Tencent And NetEase Stocks Rebound As China Reportedly Ousts Official Behind New Gaming Restrictions – Forbes

The Chinese government has ousted a top official in charge of regulating the country’s gaming industry, according to reports, in a likely effort to stem the damage from a stock market rout over proposed restrictions on online games in late December.
China’s gaming industry faced a stock market route just before Christmas holidays after a new … [+] proposal sought curbs on spending and engagement from players.
Feng Shixin was forced to step down from his role as the publication bureau chief at the Communist Party’s Central Propaganda Department, Reuters and South China Morning Post reported.
The department led by Feng oversaw the National Press and Publication Administration (NPPA), which published a controversial set of proposals aimed at limiting spending and engagement on online games late last month, triggering a $80 billion stock market selloff.
Shares of Tencent, China’s largest games publisher, rose to $38.42 (HK$ 300.20) on Wednesday afternoon, up 1.2%.
Shares of NetEase, China’s other major gaming giant, also responded positively to the news, jumping 1.5% to $19 (HK$ 148.30).
According to the South China Morning Post, Feng’s sudden exit is likely a sign that Beijing will wind back some proposed rules outlined by the NPPA.
Over the past week, shares of Tencent, NetEase and other game publishers like Bilibili have mounted a slow recovery as Beijing signaled it was willing to work with the industry on the new regulations. Following that, the NPPA announced it had approved 105 new video games on Christmas day—the most cleared in one go since July 2022. Despite the recovery, however, Tencent’s stock is still down more than 5% compared to its December peak, while NetEase is down more than 11%.
Last month, the NPPA published a set of new draft rules that proposed major restrictions on online games, sparking fears of a wider crackdown on the games industry by Beijing. The proposal called for spending limits on games, along with pop-up warnings discouraging “irrational consumption behavior.” The rules would also prevent game companies from offering rewards for behavior, like daily logins or forcing player battles. The rules also called for censorship of content “endangering national security, or damaging national honor and interests,” while requiring publishers to age verify and limit access to minors.
Chinese video gaming official steps down after market rout linked to proposed rule changes, sources say (South China Morning Post)
China removes official after video games rules spark turmoil (Reuters)
Shares Of Tencent And NetEase Nosedive After China Proposes New Online Gaming Restrictions (Forbes)

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