In a surprising move, China’s National Press and Publication Administration (NPPA) has removed proposed rules from its website that aimed to restrict spending and rewards in video games as reported by Reuters on Tuesday(Wednesday as per IST).
The draft rules, introduced last month and targeting spending limits for online games, had initially led to market turmoil, resulting in a substantial drop in market value for Tencent and NetEase.
The unexpected removal of the proposed regulations has left analysts speculating about potential revisions, highlighting the unusual nature of the development. Reuters reports suggest that the deletion of the rules could indicate forthcoming changes, reflecting the authorities’ responsiveness to public opinion and industry concerns.
Tencent, the world’s largest gaming company, and its competitor NetEase witnessed a positive impact on their shares, with increases of as much as 6% and 7%, respectively, during morning trading.
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Both companies maintained over a 4% increase in share value at noon against a 2.4% increase in Hong Kong’s Hang Seng Index. The proposed rules, which originally triggered market concerns, aimed to set limits on spending within online games.
Analysts, observing the removal of the rules, consider it an unexpected move, suggesting that revisions or alterations may be in the pipeline.
The NPPA has not yet provided a comment on the reasons behind the removal. Previously, the regulator had hinted at potential improvements to the rules, taking into account public feedback.
The situation underscores the dynamic and sometimes unpredictable nature of gaming regulations in China, where the government seeks a delicate balance between fostering a thriving industry and addressing concerns over excessive gaming-related spending.
