Tuesday, February 27, 2024

China is showing signs its intense crackdown on the video game sector is easing

Must read

Offerpad narrows Q4 loss, expects to be back in black later this year

The iBuyer expects to sell between 750 and 850 homes during Q1 2024, generate $245 million to $285 million in revenue and...

Institutional investors are scooping up Kiavi’s ‘fix and flip’ bridge loans

Kiavi upsizes its 16th securitization to $350 million and says largest deal since November 2021 brings total issuance since 2019 to $4...

With $15M goal, Knock turns to ‘everyday’ investors

Alternative financing company Knock has secured $10 million from Second Century Ventures, the venture capital arm of the National Association of Realtors,...

Star broker Jaime Richichi moves to Sotheby’s International Realty

NYC Compass broker Jaime Richichi is taking her talents to Sotheby’s International Realty. Richichi’s home base will be SIR’s East Side Manhattan...

Chinese regulators have increased scrutiny on the domestic game sector over the past year and a half. But new batches of game approvals and positive steps on improving gaming addiction among kids under 18 years old, could be positive signs that the crackdown is easing.

Xing Yun | Costfoto | Barcroft Media | Getty Images

Beijing is showing signs that its intense crackdown on the domestic video games sector could be easing which may be bullish for Chinese tech giants including Tencent and NetEase.

On Tuesday, research firm CNG alongside the China Game Industry Group Committee, which is affiliated with the gaming publishing regulator, published a report in which they praised the progress on reducing gaming addiction among people under the age of 18.

related investing news

UBS says self-driving cars could become a $100 billion market in China — and names stocks to play it

CNBC Pro

Regulators have been concerned for some time about gaming addiction among minors. Last year, China’s National Press and Publication Administration brought in rules that restricted kids under 18 years old from playing online games for more than 3 hours per week.

The CNG report holds weight because it has been published in conjunction with a key gaming industry body with links to the regulator. The report said more than 70% of minors play games for less than 3 hours a week, and the problem of minors’ game addiction has “achieved a step toward resolution,” according to a CNBC translation.

The positive report could signal a more bullish outlook toward the Chinese gaming sector.

“China’s strict regulatory approach over the past year has been a result of a lack of enforcement and compliance across key areas,” Daniel Ahmad, senior analyst at Niko Partners, told CNBC. “With game companies now fully compliant, we are seeing a more positive outlook start to develop.”

The CNG report also singles out major Chinese gaming companies including Tencent and NetEase for their positive moves enforcing the protection of minors.

For example, both Tencent and NetEase use facial recognition to see whether the person playing the game is an adult.

Another positive sign came last week when the regulators approved a batch of 70 new games for release. In China, video games need approval to be published and monetized. Among the approvals was a game titled Metal Slug: Awakening from Tencent, marking the company’s first commercial game license in a year and a half, according to Reuters.

Last year, China froze game approvals in the summer and only began green lighting games in April this year. But titles from Tencent, China’s largest gaming firm, have been absent from the lists until now.

Tencent management last week told analysts on its third-quarter earnings call that the company expects game licenses to be approved relatively quickly in the future, adding to further signs of regulatory scrutiny on the sector easing.

Martin Lau, president of Tencent, said the company is seeing “positive signals across the path of macro and regulatory normalization.”

More articles

Latest article

Offerpad narrows Q4 loss, expects to be back in black later this year

The iBuyer expects to sell between 750 and 850 homes during Q1 2024, generate $245 million to $285 million in revenue and...

Institutional investors are scooping up Kiavi’s ‘fix and flip’ bridge loans

Kiavi upsizes its 16th securitization to $350 million and says largest deal since November 2021 brings total issuance since 2019 to $4...

With $15M goal, Knock turns to ‘everyday’ investors

Alternative financing company Knock has secured $10 million from Second Century Ventures, the venture capital arm of the National Association of Realtors,...

Star broker Jaime Richichi moves to Sotheby’s International Realty

NYC Compass broker Jaime Richichi is taking her talents to Sotheby’s International Realty. Richichi’s home base will be SIR’s East Side Manhattan...

Should you leave your brokerage? 5 questions to ask yourself first

Should you tough it out at your current brokerage or risk the unknown by leaving? Milena Monet shares questions to ask yourself...