As a result of the approval of the nation’s first batch of new titles in more than eight months, Tencent Holdings Ltd.’s stock soared over 5%, joining the rest of China’s gaming world in a campaign.
According to a review by Bloomberg News, the National Press and Publication Administration published a list of 45 domestic titles on its website late Monday night, affirming the initial article. The absence of officials Tencent and NetEase Inc. from a list of mostly simple games allayed investors’ worst concerns regarding Beijing’s motives for the gaming industry, which had come under fire for encouraging addiction and other unacceptable behavior by the youths. The long-awaited reinstatement of licensing allayed shareholders’ worst concerns regarding Beijing’s motives for the gaming industry, which had faced criticism for trying to encourage addictive behavior and other unacceptable behavior among young adults.
In Hong Kong, Tencent has made the highest intraday gains in the last three weeks. Bilibili Inc., a video and game streaming business, increased by 15%, while NetEase increased by over 6%. DouYu International Holdings Ltd., a video site, increased by 2.4 percent in New York trading. In a note to investors, Citigroup analyst Alicia Yap stated that restoring game approval is a positive step for China’s games business. According to the statement, it would strengthen investor confidence that the government remains supportive of the games sector’s cultural and innovative features and could herald a return to a more systematic review process.
Beijing’s broad digital campaign, which has engulfed industries ranging from e-commerce to fintech and even e-learning, expanded to online gaming in August when regulators enforced new regulations banning kids’ playtime and imposing new restrictions designed to prevent addiction. According to Bloomberg News, the media watchdog has also begun assessing new titles to see if they match stricter content and kid security guidelines, which has delayed rollouts.
Only local firms were represented among the titles approved on Monday, including a Baidu Inc. game, XD Inc.’s “Flash Party,” and iDreamSky Technology Holdings Ltd.’s “Watch Out For Candles.” 37 Interactive Entertainment and Youzu Interactive Co. were also on the bill. Five of the 45 games allowed are for the PC, one is for the Nintendo Switch system, and the rest are for mobile devices. Many of them appear to be low-stakes games with little player expenditures.