The monetization of new video games has stopped in China since last July. This also affects the big Chinese gaming groups Tencent and NetEase, which have lost a lot of growth potential under the brutal measures. According to a report from Reuters however, the lockdown could finally end now.
Because the Chinese regulator approved on Monday the monetization of 45 games. Although there are no titles from Tencent or NetEase on the list, the approval has a signal effect. However, among the approved games are titles from other listed companies such as Baidu or iDreamSky.
Tencent shares reacted in German trading with a strong advantage, which was able to offset morning losses in one fell swoop. Most recently, the Chinese gaming giant’s stock rose 1.1 percent to EUR43.79. NetEase ADRs were also markedly higher in early US trading. More recently, the shares were up 3.1 percent at $95.92.
Many of the measures taken by the Chinese authorities are still in place, including time restrictions for minors. However, the current monetization approvals should be seen as a step in which regulators are loosening the reins a bit. More permissions could follow, then also for Tencent and NetEase. This would be excellent news for the two Chinese gaming giants.
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