Chinese Gaming Regulator Removes Proposed Rule Changes from Website
The Chinese gaming regulator has unexpectedly removed a series of proposed rule changes from the National Press and Publication Administration website, according to a report by Reuters. The changes, which included measures such as requiring publishers to have servers based in China and imposing spending limits on online games, drew widespread criticism from gaming companies and resulted in a significant drop in share prices. The removal of the rules from the website could indicate that further revisions are being considered.
Uncertainty over the Future of Gaming Restrictions in China
The sudden removal of proposed gaming restrictions by the Chinese government has left many in the industry unsure of what the future holds. Chinese gaming companies, including TenCent and NetEase, saw their share prices plummet after the measures were announced in December 2023. However, the government later indicated that it was open to revising the rules after receiving negative feedback from investors, businesses, and the public. The complete removal of the proposed changes from the official website has raised questions about the government’s next steps.
Potential Impact on Chinese Gaming Giants
The proposed rule changes had a significant financial impact on Chinese gaming giants TenCent and NetEase, with a combined market value loss of nearly $80 billion. However, the removal of the rules from the National Press and Publication Administration’s website resulted in an immediate increase in both companies’ share prices. This sudden reversal of fortune has provided some relief to investors, although the ultimate outcome of the proposed rule changes remains uncertain.
Speculation over Government’s Intentions
The removal of the proposed rule changes from the government’s website has sparked speculation about the Chinese government’s intentions. Some experts suggest that this could indicate that further changes are being considered before any final decisions are made. However, it is worth noting that previous regulatory changes have typically remained on the website even after the public consultation period, making this removal unusual.
Positive Market Reaction to the Removal
Investors interpreted the removal of the proposed rule changes as a positive sign, leading to a sharp increase in the share prices of TenCent and NetEase. The removal of the rules may suggest that the government is taking into account the concerns raised by the gaming industry and the public, potentially signaling a more lenient approach. However, it remains to be seen whether this positive market reaction will be sustained in the long term.
Analyst comment
Positive news: The removal of proposed gaming restrictions by the Chinese government has resulted in a sharp increase in share prices of Chinese gaming giants TenCent and NetEase, providing relief to investors.
Market forecast: The removal of the proposed rules could indicate that the government is considering further revisions. The market may experience short-term relief, but uncertainty remains about the ultimate outcome of the proposed rule changes.
