Shares of online gaming companies rose dramatically on Wednesday after Chinese authorities approved the release of dozens of new games, sending a positive signal to the country’s gaming sector, industry analysts said.
The National Press and Publication Administration said on Tuesday it had approved 60 new games, following the first batch of approvals of the year in April.
The latest endorsements include games from Perfect World, Hero Entertainment and Migu Interactive Entertainment, but games from tech giants Tencent Holdings Ltd and NetEase Inc were not on the list.
Shares of online gaming and entertainment company Dasheng Culture jumped from the daily limit of 10% to close at 4.46 yuan (70 cents) on the Shanghai Stock Exchange, while shares of Tencent jumped 6 .47% to end at HK$391.4 ($49.9) on the Hong Kong exchange. .
The move was seen as a signal of the country’s loosening of regulations for the gambling industry, experts said. The administration in April announced licensing approvals for 45 new game titles after more than eight months since game licensing was halted.
“The latest game license approval will boost the confidence of the game industry, investors and related businesses,” said Liao Xuhua, cultural consumption industry analyst at Beijing-based market consultancy Analysys. .
Chinese game companies should constantly increase investment in mobile game research and development, improve the quality of game content and step up efforts to expand their footprint in overseas markets, Liao added.
Chinese regulators have tightened requirements for online gambling companies to limit hours of service for minors since August last year and have strictly implemented rules that users register with real names, in order to prevent children from abusing it and to protect their health.
The latest announcement demonstrated that the country is encouraging the development of innovative small and medium-sized gaming unicorns, said Chen Jia, a researcher at the International Monetary Institute of Renmin University of China.
Chen said he is optimistic about the prospects for the game industry in the country, given the huge user base and the emergence of a series of the world’s leading game and technology companies. .
He added that game companies should integrate advanced technologies, such as artificial intelligence, augmented reality and virtual reality, and expand application scenarios in entertainment, commerce and even finance sectors. .
China’s gaming industry revenue was 296.5 billion yuan in 2021, up 6.4% year on year, a sharp decline from a growth rate of 20, 7% in 2020, according to an industry report published by the Game Publishing Committee of the China. Association of audio-video and digital publishing.
The number of mobile game users reached 656 million last year, a slight increase of 0.23 percent from a year earlier, with revenue accounting for 76 percent of the overall gaming segment, according to the report.
Chinese game companies have accelerated steps to expand their presence around the world. According to mobile app data analytics firm Sensor Tower, 38 Chinese game publishers made their way onto the list of the world’s top 100 mobile game publishers by revenue in April.
The 38 developers raised more than $2.3 billion worldwide in April, accounting for 41.8% of the revenue generated by the top 100 companies on Apple’s App Store and Google Play. Tencent ranked first among all Chinese game publishers in revenue generated during this period.