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Facts Chronicle > Technology > Chinese Gaming Regulator Removes Proposed Rules for Video Game Spending Limits
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Chinese Gaming Regulator Removes Proposed Rules for Video Game Spending Limits

Amelia Collins
Last updated: January 28, 2024 5:47 am
Amelia Collins Published January 28, 2024
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The gaming regulator in China has made a significant move by removing proposed rules from its website that aimed to control spending and rewards associated with playing video games. The removal of the draft rules from the National Press and Publication Administration’s (NPPA) website came after the consultation period for the rules ended on Monday, and the link to the draft rules became inaccessible on Tuesday morning. This unexpected removal has sparked speculation about potential revisions to the proposed measures.

The draft rules had initially caused market turmoil, resulting in a substantial decline of nearly $80 billion in market value for China’s two largest gaming companies, Tencent Holdings, and NetEase, when they were first announced. The initial draft rules suggested spending limits for online games, which raised concerns and panic among investors. However, the NPPA later adopted a more conciliatory tone, expressing a commitment to improve the rules by considering public views.

Following the removal of the draft rules from the website, shares of Tencent Holdings and NetEase rose by as much as 6 per cent and 7 per cent, respectively, in morning trading, with both companies maintaining an increase of more than 4 per cent at noon against a 2.4 per cent rise in Hong Kong’s Hang Seng Index. Analysts have noted the unusual nature of this move and suggested that it could signal further changes in the proposed measures.

Opinions on the topic vary, with some analysts expressing the expectation that the government might remove contentious articles, such as Articles 17 and 18, from the final rule. Other analysts have highlighted that regulators have been working to address the negative reactions from investors, businesses, and the public, indicating a moderated stance and labelling the proposal as ‘negotiable.’ It remains to be seen how the gaming regulator in China will proceed with potential revisions to the proposed rules.

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