Since April 2022, Chinese regulators have resumed approval of video games after a month of freezing with signs that Beijing’s game crackdown has been eased.
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After regulatory approvals for a number of new games, the share of Chinese gaming companies rose on Wednesday. This indicates that some of the headwinds in this sector may be mitigated.
The list released on Tuesday by China’s National Press Publishing Office did not include game approval from the giants. Tencent When NetEase..
Tencent’s stock was flat in Hong Kong’s trade, but other companies rose due to continued game approvals that resumed in April after a month of freezing.
NetEase’s Hong Kong-listed stock was nearly 3% higher in afternoon trading during a huge stream Bilibili It increased by more than 4%. Bilibili has approved two games with the latest tranche.
Share KingsoftAnother publisher, also high in Hong Kong trade.
Meanwhile, ByteDance, a subsidiary of TikTok, has also approved the game.Headquartered in Beijing ByteDance is an active player in the online gaming sector Through acquisitions that helped increase player spending.
In China, games need to be approved and monetized by regulatory agencies for release.
Beijing has been targeting games for the past year and a half as part of a thorough investigation of tech companies.Last year, China introduced the following rules: Limited playback time Up to 3 hours a week for online games for children under the age of 18. Regulators have since frozen approval of the new game for several months.
This has a huge impact on companies that are heavily dependent on games.China’s largest game company Tencent recorded record low revenue growth In the first quarter of this year.
However, three game approvals since April suggest that crackdowns may have been relaxed.
“We believe that the second straight month of approval should ease market concerns about industry trends,” Jeffreys equity analyst Thomas Chung said in a note on Tuesday.
Chong said Tencent, NetEase and Bilibili are one of the companies “set to benefit from increased visibility into game approval.”
Daniel Ahmad, senior analyst at Niko Partners, said returning approvals to one batch per month was a “positive sign for the industry,” but said they were only for domestic games.
“We expect the first batch of imported titles to be approved in the near future, based on past precedents,” he said, referring to games developed by foreign publishers.
