China Approves 105 New Online Games, Easing Investor Concerns
China’s press and publications authority has approved 105 new online games, signaling its full support for the industry following proposed curbs that caused massive losses for investors in major games makers last week.
The National Press and Publication Administration issued a statement on its WeChat social media account on Monday, stating that the approvals by the Game Working Committee of China Music and Digital Association were “positive signals that support the prosperity and healthy development of the online game industry.”
Among the games approved were Tencent’s “Counter War: Future” and NetEase’s “Firefly Assault.”
The approval of new games comes after draft guidelines for curbs on online gaming had caused share prices of video game makers like Tencent and NetEase to plunge on Friday, resulting in losses of tens of billions of dollars and dragging Chinese benchmarks lower.
The administration’s guidelines include banning online games from offering incentives for daily log-ins or purchases, limiting how much users can recharge, and issuing warnings for “irrational consumption behavior.”
Following the announcement of the approvals, the market responded cautiously. Netease’s Nasdaq-traded shares fell 16.1% and its Hong Kong-traded shares sank 25% on Friday. Tencent closed 12% lower, while Huya Inc., a smaller online games maker, lost 10.7% on the New York Stock Exchange. Overall, these companies suffered tens of billions of dollars in market value losses.
The Press and Publication Administration also cited a “2023 China Game Industry Report,” which showed that sales revenue for the domestic online games market exceeded 300 billion yuan ($42 billion) in 2023, with the number of people playing the games reaching 668 million.
The Game Working Committee expressed hope that member units will take the opportunity to launch more high-quality products, promote the high-quality development of the online game industry, and contribute to promoting cultural prosperity and development in China.
This decision to approve new games comes after a series of measures against the online games sector in recent years. In 2021, regulators limited the amount of time children could spend on games to just three hours a week, and approvals of new video games were suspended for about eight months. However, they resumed in April 2022 as a broader crackdown on the entire technology industry was eased.