NetEase’s stock has rallied 85%, bringing it within spitting distance of the same highs it experienced before the Chinese gaming crackdown, and eclipsing competitor Tencent in the process.

The Hang Seng Index, which tracks the stock performance of companies traded on the Hong Kong Stock Exchange in real time, indicated today that NetEase’s stock has rallied 85% since a low point in October 2022, in the midst of the China licencing freeze.

After a total freeze on game licences - which titles including those on mobile need to release in China - authorities finally began rolling back the freeze in late 2022. June 2023 saw the number of approvals hit 89, the highest for a single month this year yet but still far below original levels. Companies such as Tencent and NetEase have partially combatted local restrictions with more international releases and investment abroad, although China remains their primary market.

NetEase is back

NetEase has been on a roll recently, with the opening of multiple international studios in a variety of countries. These new studios include Japanese-based Pincool, Canada-based Bad Brain Studios and major European studio Anchor Point, representing only a handful of the company’s worldwide expansion in the wake of the licensing freeze.

Although Tencent and NetEase are well on the road to recovery it’s already been made clear that the Chinese gaming crackdown was a severe shock to both, and other companies in the space. It could be that in the near future we’ll see confidence return to the market, but for now it seems that the main goal is to expand their focus beyond just China and Asia and instead to establish themselves globally.

We’ve already seen this expanded focus with Eggy Party’s immense success, as domestically it’s one of China’s three most downloaded games, but it also saw a simultaneous release in other major markets like the Philippines.