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Tencent and Netease Rally on Signs China May Ease Gaming Proposal

But, he added, their impact might be less than feared, as the authorities could adjust or drop some of the provisions. Consumer demand for games and the social interactions they allow would remain unaffected, he added.

Analysts from Nomura, a Japanese bank, said in a report on Tuesday that the rules could “significantly impair” Chinese video game companies’ ability to make money.

The “fire-quenching measures” that the government has rolled out since Friday, Nomura added, will ease investor concerns but won’t remove the shadow it has thrown over China’s video game sector.

The industry is still reeling from restrictions first imposed in 2019 aimed at what the government deemed was an online gaming addiction among minors, as well as a broader crackdown against tech companies. Regulators also stymied publishers by not issuing any new game licenses for an eight-month stretch that ended in April 2022.

Tencent and Netease have downplayed the impact of the proposed regulations.

The draft rules did not “fundamentally change the game’s business model, operating rhythm or other key elements,” Vigo Zhang, vice president of Tencent Games, said in a statement on Friday. Netease said over the weekend that the proposal would not have any substantial impact on its business, adding that it would share its views with the authorities.

The regulatory agency said it would accept comments on the proposal until Jan. 22.


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