In a significant move, China's press and publications authority has approved 105 new online games, signaling strong support for the industry. The decision comes in the aftermath of proposed restrictions that led to substantial losses for major game developers last week.
The National Press and Publication Administration, through a statement on its WeChat social media account, highlighted the approvals by the Game Working Committee of China Music and Digital Association as positive signals for the prosperity and healthy growth of the online game sector. Tencent's "Counter War: Future" and NetEase's "Firefly Assault" were notable titles among the approved games.
The recent draft guidelines proposing constraints on online gaming had triggered a sharp decline in share prices for companies like Tencent and NetEase, resulting in significant financial losses and impacting Chinese market benchmarks. The administration's guidelines include bans on incentives for daily log-ins or purchases, limitations on user recharge amounts, and warnings for "irrational consumption behavior."
Following the regulatory uncertainty, Netease's Nasdaq-traded shares fell 16.1%, and Hong Kong-traded shares plummeted 25% on Friday. Tencent experienced a 12% drop in its share prices, while Huya Inc., a smaller online games maker, lost 10.7% on the New York Stock Exchange. The collective market value losses for these companies amounted to tens of billions of dollars.
The Press and Publication Administration highlighted that in 2023, a total of 1,075 game version numbers were issued, with 977 being domestically produced and 98 imported. The administration cited the "2023 China Game Industry Report," indicating that sales revenue for the domestic online games market exceeded 300 billion yuan ($42 billion) in 2023, with 668 million people engaging in gaming.
"The Game Working Committee hopes that member units will take this opportunity to launch more high-quality products, promote high-quality development of the online game industry, and contribute to promoting cultural prosperity and development and building a culturally powerful country," stated the administration.
China has implemented various measures in recent years to regulate the online games sector, including restrictions on children's gaming time and suspensions of new game approvals. The latest approvals and supportive stance signal a potential balance between industry growth and regulatory considerations.
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