Tencent & NetEase Unlock Growth After New Gaming Guidelines Emerge

Tencent & NetEase Unlock Growth After New Gaming Guidelines Emerge

Updated on 27 Dec 2023 : Tencent Holdings (0700.HK), the prominent Chinese online gaming giant, experienced a modest recovery in its shares on Wednesday, marking the first day of trading following regulators’ commitment to refining proposed rules that had previously caused a significant decline in gaming company stocks. In the morning trade, its Hong Kong-listed shares increased by 3%, bouncing back from a 12% drop last Friday, with Hong Kong markets closed on Monday and Tuesday for public holidays.

Similarly, competitor NetEase (9999.HK) witnessed a notable rebound, surging by 14% compared to the 25% decline on Friday. Reports circulating since Monday suggested that NetEase is back in discussions to collaborate with Blizzard, the creator of World of Warcraft, contributing to the positive momentum. The two companies had separated abruptly a year ago.

Earlier this month, Blizzard China, the company’s Chinese subsidiary, indicated on Weibo, China’s top micro-blogging site, that it is negotiating with publishing partners in China to ensure the continued service of the game in the country.

Despite initial concerns sparked by Chinese regulators’ announcement of draft rules to regulate spending and rewards associated with video games, leading to a drop in gaming sector stocks, there has been a perceptible shift in the regulator’s stance. The National Press and Publication Administration, China’s video game regulator, released a statement on Saturday expressing a commitment to refining the proposed rules after a thorough study of public feedback.

Moreover, on Monday, the regulator granted approval for 105 new licenses for domestic online games in December, a move viewed by analysts as a strong indication of continued government support for the development of online games. The industry seems poised for growth, and Tencent & NetEase are positioned to unlock further opportunities amid these developments.

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Ingrid Mueller

Ingrid Mueller, a literary expert with a Ph.D. in Literature from Yale University, brings a touch of artistry to her writing. Her critical analyses and cultural insights provide a fresh perspective on trending news. Ingrid's articles are a treat for those seeking a deeper understanding of the world around them. Explore the trends through her unique lens.

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