A significant event occurred in the video game industry in China with the dismissal of top official Feng Shixin from his role overseeing the country’s video game regulator. This decision was made following unsuccessful attempts to enforce stricter regulations on the gaming sector, resulting in a notable market downturn and significant losses in gaming stocks.

Feng Shixin, previously in charge of the publishing unit of the Chinese Communist Party’s publicity department, was officially removed from his position last week. Sources indicated that Feng’s departure was directly linked to the proposed video game restrictions announced on December 22.

The proposed restrictions aimed to discourage excessive video game usage by implementing limits on in-game spending and daily login rewards. However, these measures led to widespread panic among investors and a significant sell-off in gaming stocks.

Industry giants such as Tencent, NetEase, and BiliBili experienced substantial losses, with their combined market value declining by over $80 billion in a single day. Chinese officials promptly retracted the proposed regulations and announced plans to revise them in consideration of feedback from the industry.

While Feng Shixin’s dismissal was seen as an attempt to mitigate further market turmoil, industry executives like Steven Leung from brokerage firm UOB Kay Hian remain cautious. Leung expressed concerns about the ongoing uncertainty surrounding China’s gaming policies and its potential impact on market stability.

The State Council Information Office of China has not issued any public comments on the situation, leaving industry observers and investors eager for additional clarity on the future of video game regulations in the country.