In a whirlwind of events, China’s press and publications authority has given the green light to 105 new online games, leaving investors and game makers in awe after losses were suffered last week due to proposed restrictions. The National Press and Publication Administration, in a statement on its WeChat social media account, expressed its support for the industry, considering these approvals to be positive signals for the growth and well-being of the online gaming world.
Among the games that received the stamp of approval are Tencent's “Counter War: Future” and NetEase's “Firefly Assault,' two highly anticipated titles that had faced uncertainty in recent days. These approvals signify a glimmer of hope for game makers and enthusiasts alike, as it appeared that the road ahead was becoming increasingly precarious.
Last week, the release of draft guidelines for curbing online gaming had dire consequences for major players in the industry, such as Tencent and NetEase. Share prices plummeted, causing massive losses worth tens of billions of dollars and dragging down Chinese benchmarks. The proposed guidelines outlined various restrictions, including a ban on incentives for daily log-ins or purchases, limiting user recharge amounts, and even issuing warnings for 'irrational consumption behavior.'
The turmoil was not contained within the gaming realm, as stock markets were shaken by the downward spiral. Netease's shares took a colossal hit, falling 16.1% on the Nasdaq and a staggering 25% on the Hong Kong exchange. Tencent didn't fare much better, closing 12% lower. Even smaller game maker Huya Inc. suffered, losing 10.7% on the New York Stock Exchange. The cumulative effect of the crisis resulted in substantial market value losses for these companies, leaving shareholders and investors reeling.
While Hong Kong's market was closed on Christmas Day, leaving traders on the sidelines, Shanghai's market saw little movement. However, the industry was offered a glimmer of hope with the announcement from the Press and Publication Administration. According to their statement, 1,075 game version numbers were issued in 2023, with 977 produced domestically and 98 imported. The administration also drew attention to the '2023 China Game Industry Report,' which revealed that sales revenue in the domestic online gaming market exceeded a staggering 300 billion yuan (roughly $42 billion) and the number of players reached a staggering 668 million.
It is clear that the gaming industry holds immense economic and cultural power in China. The Game Working Committee, responsible for these approvals, hopes that game developers will seize this opportunity to create more high-quality products and contribute to the overall prosperity and development of the online gaming sector. Their aspirations extend beyond financial success as they aim to foster cultural growth and build a more culturally powerful country.
Interestingly, this is not the first time China has implemented measures to regulate the online gaming sector. In 2021, concerns were raised about addiction among youth, leading regulators to restrict playing time to a mere three hours per week for children. Furthermore, new video game approvals faced an eight-month suspension until April 2022 when the broader crackdown on the technology industry began to ease.
The rollercoaster ride for China's gaming industry continues, with each twist and turn unraveled. However, with these recent approvals, we may yet see a revival and rejuvenation of the online gaming landscape. The road ahead may still be uncertain, but for now, players and investors can breathe a sigh of relief as the ephemeral fog begins to lift.
