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Chinese Video Game Companies Rose After Regulatory Approvals

After months of freezing regulatory approvals for new video games, Chinese censors grant approval and send video game stocks higher

Chinese regulators have approved the first batch of revenue-generating video games for companies since last July, ending a game freeze that hurt the businesses of some of China’s biggest tech companies.

US-listed shares of NetEase, one of the largest gaming companies in China, rose 4% in early trading, and shares of broadcasters also jumped, including Bilibili, Huya and Dou Yu.

Companies in China need regulatory approval to make their games monetised, and the National Publication and Press Administration of China has given approval to release 45 games, but the names of NetEase and Tencent games were not on the list.

The granting of approval indicates that there is an upcoming easing by regulators towards the video game industry after months of difficulties faced by the industry due to the regulatory tightening in China on the tech sector. Read more [Chinese Tech Stocks Fell After the Outbreak of the Epidemic] and [Top Ranks Analysts are Optimistic About These Stocks].

Authorities in the world’s second-largest economy have been concerned about video game addiction among children under the age of 18, and last year, China announced laws to limit children’s online video game playtime to just three hours a week. Read more [China’s Censorship Crackdown Reaches Video Games].

Although users under the age of 18 represent a small portion of the revenue of companies such as Tencent and NetEase, the lack of game approvals is having a severe impact on companies, and as a result, Tencent last month reported the slowest quarterly revenue growth in its history. During the fourth quarter of 2021. Read more [Tencent’s Revenue Records Slowest Growth In The 4Q].

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