China has dropped its rhetoric on new in-game spending regulations.  The sharp market reaction helped
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games
January 3, 2024 at 8:21 pm


author: Zuzana “Zozolik” Domiradzka


Due to the stock exchange's backlash, regulations for new games in China will be changed. Given this and the alleged talks between NetEase and Blizzard, the future of the industry giants doesn't look as bad as it seemed.




Image source: Blizzard Entertainment/NetEase.

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Ahead of the holidays, the world received important information about the future of gaming and monetization in China. The announced regulations seemed so unfavorable for two huge companies, Tencent and NetEase, that they worried investors and led to sharp declines in the shares of Chinese giants on the stock exchange. It turns out that the Middle Kingdom did not remain completely indifferent to such a reaction.


Change the rules

Let's remember that initially the new regulations concerned primarily micropayments in games. Its effect will be to reduce Chinese companies' revenues from various products. Creators will have to impose limits on account top-ups, stop encouraging players to continue playing the game (for example, through login bonuses every day), and warn users against excessive spending.

This information caused the value of shares of Chinese companies to decline (Tencent by 15%, and NetEase by 25%). This country's video game regulator (the National Press and Publication Administration, NPPA) decided to relax and improve the rules by “reliably examining public opinion.” (via Reuters).

We do not know what exactly will be changed and whether the issue of micropayments in games will not be significantly limited. However, Nomura analysts are not entirely convinced:


We believe that these precautionary measures may help to some extent in alleviating market concerns, but they will not be sufficient to eliminate the decline caused by the draft regulation.

Both the stock market situation of Tencent and Netease slight I corrected, which could have been the result of an announcement about changing the rules in the Chinese gaming industry. Interestingly enough, because of the whole situation, he was supposed to stay out of his position Deleted Feng Shixin, who was the head of the publishing unit of the department supervising the NPPA. according to Experts This decision may also calm the mood of investors who are panic selling shares of Chinese giants.

Will NetEase and Blizzard finally reconcile?

You've probably heard that at the beginning of last year, Blizzard ended its cooperation with NetEase due to the two companies' failure to reach an agreement on extending the licensing agreement. This affected Chinese gamers who lost access to games like World of Warcraft and Diablo.


NetEase was so affected by this that it closed the offices used to fulfill the contract with Blizzard, an orc with F-AIt also demanded compensation of US$43.5 million. Despite this uninteresting relationship, the Chinese giant has been in new talks with the American publisher for some time (via Reuters). Renewed collaboration and access to popular series will certainly help NetEase further in this uncertain period.


We'll have to keep an eye on how the situation evolves regarding gaming monetization in China. Will the announced changes prove to be entirely beneficial for the Giants, or will the regulator lead to a compromise, keeping in mind the well-being of players and continuing the fight against addiction.











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