The gaming world erupted with excitement as China gave the green light to 105 online video games on Monday, in response to the recent implementation of stricter gaming regulations by regulators. This decision brought relief to gaming companies such as NetEase (NTES), whose stocks experienced a significant decline on Friday but rebounded on Tuesday.
On Friday, China’s National Press and Public Administration (NPPA) proposed new restrictions on video gaming, including limits on the amount of time minors can play games and in-game spending. This proposal sparked concerns of a potential crackdown on the gaming industry, causing shares of gaming giants such as Tencent Holdings (TCEHY) to plummet to a 52-week low. Other companies like Bilibili (BILI) and Huya (HUYA) also saw substantial declines as a result.
E-commerce giants Alibaba (BABA), JD.com (JD), and Pinduoduo (PDD) were also impacted, all falling by more than 1% on Friday amid concerns of a broader regulatory push.
However, the NPPA announced over the weekend that they would be seeking feedback from both video game makers and players. This led to a positive turn of events when China approved a total of 105 video games on Monday, the highest number in the past 17 months.
Despite this, the Hang Seng in Hong Kong remained closed for the Christmas holiday on Tuesday.
The approval of these video games resulted in a rebound in stock prices for key players in the industry. NTES stock surged by 5.2%, while Tencent saw a 3.45% increase. BILI stock also climbed by 2%, and Huya rebounded by 3.7%. As for BABA, JD.com, and PDD, their stocks saw a modest climb of less than 1%.
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With this turn of events, it is evident that the gaming world is experiencing positive developments. With the regulatory landscape showing signs of stability, there is hope for a brighter future in the gaming industry.
Stay tuned for more updates on this exciting industry!
