Stock prices jump as China backtracks on gaming restrictions

Stock values of major Chinese gaming firms such as Tencent and NetEase recover as deadlines pass and China's gaming clampdown evaporates - for now

Stock prices jump as China backtracks on gaming restrictions

China appears to have reconsidered its stringent regulations aimed at addressing what the regulatory body labeled as “excessive" gaming.

The National Press and Publication Administration (NPPA) had initially released proposed regulations that - had they been implemented - would have restricted both the money and time individuals dedicated to playing video games.

However as of Tuesday 23 January - a day after the 22 January deadline for consultation and discussion concerning its implications and outcome had passed - these same draft regulations were no longer available on the NPPA website.

The indication therefore is that the restrictions are at least being altered to something more in line with the needs and wants of those that they would effect, or - at best - being withdrawn altogether.

China is world's largest online gaming market despite regulatory challenges from its own government aimed at curtailing the adoption of video games.

Stock values of major Chinese gaming firms such as Tencent and NetEase had experienced a significant decline following the initial release of the draft. However, as the proposals were withdrawn Tencent, having reached a low of $33 by Monday, are now at $36, while NetEase jumped from $90 to $101 in the same period.

Gone… But not forgotten?

The proposed regulations aimed to impose restrictions on in-game purchases. Additionally, incentives like daily log-in rewards for gamers would have faced scrutiny, and the introduction of a pop-up warning for players displaying “Irrational" behavior was suggested.

While there's no official announcement on the Chinese government regarding the draft regulations hopes will be high that today's withdrawal rather than an enforcement is an encouraging sign of a bullet being dodged.

Speaking to the BBC, Ivan Su, senior analyst at Morningstar said, “I think this type of sentiment will probably last for quite some time, unless we get a very drastic turnaround in government rhetoric, or unless we get some super supportive policies."

"We don't know if it's going to happen in a week, in a couple months, or in a couple of years."

Editor -

Daniel Griffiths is a veteran journalist who has worked on some of the biggest entertainment media brands in the world. He's interviewed countless big names, and covered countless new releases in the fields of videogames, music, movies, tech, gadgets, home improvement, self build, interiors and garden design. Yup, he said garden design… He’s the ex-Editor of PSM2, PSM3, GamesMaster and Future Music, ex-Deputy Editor of The Official PlayStation Magazine and ex-Group Editor-in-Chief of Electronic Musician, Guitarist, Guitar World, Rhythm, Computer Music and more. He hates talking about himself.