China’s gaming industry became caught up in broader regulatory tightening across the technology sector. Regulators became increasingly concerned about gaming addiction amongst children. The approval of the first batch of games since July 2021 could indicate China’s gaming sector headwinds will start to subside.
- China's National Press and Publication Administration approved a batch of 45 games for monetization, the first such approval since July 2021.
- U.S.-listed shares of NetEase, one of China's biggest gaming companies, were up more than 4% in early trade while live-streaming companies Bilibili, Huya and DouYu also jumped.
- The approval indicates a slightly more favorable view from regulators toward the gaming industry after months of headwinds amid regulatory tightening in China across the technology sector.
Chinese regulators have approved the first batch of video games for monetization since last July, ending a freeze that has hurt some of China's largest technology firms.
U.S.-listed shares of NetEase, one of China's biggest gaming companies, were up more than 4% in early trade Monday while live-streaming companies Bilibili, Huya and DouYu also jumped.
In China, companies need approval from regulators to monetize games. China's National Press and Publication Administration gave the approval to 45 games on Monday. Titles from NetEase and gaming giant Tencent were not on the list, however.
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Tencent and NetEase declined to comment when contacted by CNBC.
But the approval potentially indicates a slightly more favorable view from regulators toward the gaming industry after months of headwinds amid regulatory tightening in China across the technology sector.
Authorities in the world's second-largest economy have been concerned about gaming addiction among kids under 18 years old. Last year, China brought in rules that restricted kids' online gaming time to three hours per week.
Money Report
While under 18s are a small portion of revenue for the likes of Tencent and NetEase, the lack of gaming approvals has had an impact. Last month, Tencent reported it slowest quarterly revenue growth on record for the fourth quarter of 2021. Last week, the company announced plans to shutter its video game streaming platform. The move comes months after regulators blocked a merger between Huya and DouYu, two companies Tencent has a significant stake in, on antitrust grounds.
