Tencent Soars After China Ends Eight-Month Gaming Freeze
2022.04.12 08:06
Tencent Soars After China Ends Eight-Month Gaming Freeze
(Bloomberg) — Tencent Holdings (OTC:TCEHY) Ltd. surged more than 5%, joining the rest of China’s gaming industry in a rally after regulators approved the country’s first batch of new titles in more than eight months.
The National Press and Publication Administration published a list of 45 domestic titles on its website late Monday, confirming an earlier Bloomberg News report. While leaders Tencent and NetEase (NASDAQ:NTES) Inc. were noticeably absent from a lineup of mostly casual games, the long-awaited resumption in licensing quelled investors’ worst fears about Beijing’s intentions for the gaming sector, which had come under fire for encouraging addiction and undesirable behavior among youths.
Analysts expect Tencent and NetEase to eventually get games approved. During a previous major suspension in 2018, Tencent was also excluded from the first crop of licensed titles.
Tencent gained the most in about three weeks in Hong Kong on an intraday basis. Video and game streaming service Bilibili (NASDAQ:BILI) Inc. soared as much as 15%, while NetEase gained more than 6%. Video platform DouYu International Holdings (NASDAQ:DOYU) Ltd. rose 2.4% in U.S. trade.
“The resumption of game approval is a positive development to China’s games industry,” Citigroup (NYSE:C) analyst Alicia Yap wrote in a note. It “will help boost investor confidence that the government remains supportive of cultural and innovative aspects of the games industry and could signal resumption of a more regular approval process.”
Read more: China Ends Game Freeze by Approving First Titles Since July
Beijing’s far-reaching tech crackdown — which has ensnared sectors from e-commerce to fintech and even online education — spread to online gaming in August, when regulators introduced stringent measures capping play time for minors and imposed new requirements aimed at curbing addiction.
The media watchdog has also been reviewing new titles to determine whether they meet stricter criteria around content and child protection, an effort that’s slowed rollouts, Bloomberg News has reported.
The titles approved Monday were only from domestic companies, including a Baidu Inc (NASDAQ:BIDU). game, XD Inc.’s “Flash Party” and iDreamSky Technology Holdings Ltd.’s “Watch Out For Candles.” The line-up also included 37 Interactive Entertainment and Youzu Interactive Co.
Of the 45 approved titles, five are for PC, one for the Nintendo Switch (NYSE:SWCH) console, and the rest are mobile games. Many of them appear to be casual games with lower player spending.
©2022 Bloomberg L.P.
