Due to the turbulent reaction of the financial market to the new regulations on games in China, the planned changes will be adjusted. Especially NetEase, which is in talks with Blizzard, may now look to the future with greater optimism.
Before the holidays, news about new regulations regarding games in China and their monetization spread. Their introduction seemed unfavorable for the two biggest players in the market, Tencent and NetEase, which resulted in a significant drop in the value of their stocks. However, the Chinese government did not remain indifferent to the market’s reaction.
In summary, the new regulations initially focused mainly on microtransactions in games. Their goal was to limit the revenue of Chinese companies from titles, such as introducing top-up limits for players’ accounts, discontinuing the practice of incentivizing players through daily logins, and warning against excessive spending.
This news caused a significant decline in the stock value of Tencent (by 15%) and NetEase (by 25%). However, the Chinese video game regulator, the National Press and Publication Administration, decided to “thoroughly investigate public opinion” and adjust the regulations accordingly.
It is still unknown how exactly the new regulations will be changed and whether the introduction of restrictions on microtransactions will be severe. Analysts from Nomura believe that the planned changes may not be sufficient to offset the negative impact on the stock value of these companies.
However, it is worth noting that both Tencent and NetEase have seen some improvement in the stock market, which could be a result of the announcements about changes in regulations for the gaming industry in China. Interestingly, as a result, Feng Shixin, the head of the department that oversees the National Press and Publication Administration, has stepped down from his position. This decision may have helped calm the markets and contribute to the improvement of the situation for the Chinese giants on the stock market.
Furthermore, there is also a possibility of reconciliation between NetEase and Blizzard. Last year, the cooperation between them was terminated due to disagreements over renewing the licensing agreement. However, recently there have been reports of new talks between the Chinese giant and the American publisher, which could lead to a renewal of the partnership and the restoration of access to popular game series.
We will monitor how the situation with game monetization in China develops. Will the announced changes prove beneficial for the industry and players, or will the regulator compromise, considering the well-being of players and the fight against addiction.
FAQ:
What were the original regulations regarding games in China?
The original regulations primarily focused on microtransactions in games. They aimed to limit the revenue of Chinese companies by introducing top-up limits for players’ accounts, discontinuing daily login rewards, and warning against excessive spending.
What were the effects of announcing the new regulations on the stock market?
The announcement of the new regulations caused a significant drop in the stock value of the two largest Chinese gaming companies – Tencent and NetEase. Tencent’s stocks fell by 15%, while NetEase’s fell by 25%.
Do we currently know what changes will be made to the regulations?
Currently, the exact changes to the regulations regarding games in China are not known. However, the video game regulator in the country promises to conduct a public opinion survey and adjust the regulations accordingly.
Source:
Gry-Online.pl
The source of the article is from the blog regiozottegem.be