China Approves New Game Titles, Sending Gaming Stocks Soaring

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Bilibili Inc saw two of its gaming titles approved alongside this current batch, sending the gaming stock soaring 3.52% to HKD194.00. 

Gaming stocks in China are seeing a good day as they have been on the rise, riding on the approval of new Game titles by the government. The approval of these gaming titles was announced by the Chinese National Press and Publication Administration, a development investors believe may be signaling an end to the multi-month crackdown on the tech industry and gaming in particular.

The Chinese regulators notably approved three gaming titles since April and companies that stand to benefit the most are seeing their stocks rise in tandem. The shares of the Chinese internet technology company, NetEase Inc (HKG: 9999) is up 1.83% at the time of writing to HKD138.90. Tencent Holdings Ltd (HKG: 0700) saw a flattened slip to HKD335.40.

While Chinese regulators did not unveil the approval of any new gaming titles for the duo of NetEase and Tencent, the resumption of approvals stands to benefit both companies in the long run as they control a significant part of the Chinese gaming sector.

Prior to these approvals, Chinese regulators had been censoring accessibility to games as one of their measures to curb screen time for children not up to 18 years of age. Notably, the government imposed a screen time of a maximum of three hours per week. This embargo impacted the revenue of gaming giants like Tencent which reported the slowest revenue growth in the first quarter of this financial year.

Soaring China Game Stock

As announced, Bilibili Inc (HKG: 9626) saw two of its gaming titles approved alongside this current batch, sending the gaming stock soaring 3.52% to HKD194.00.

The Chinese regulators also approved a gaming title for a spinoff of ByteDance, the parent company of the popular social media platform, TikTok. The series of approvals might signal a new dawn for the entire ecosystem according to analysts.

“We believe the two consecutive months of approvals should allay market concerns about industry trends,” Jefferies equity analyst Thomas Chong said in a note on Tuesday. Chong called Tencent, NetEase, and Bilibili among those “set to benefit from more visibility on gaming approvals.”

While another veteran, Daniel Ahmad, a senior analyst at Niko Partners also believes the return of one batch of gaming title approvals is a “positive sign for the industry,” he highlighted how concentrated that approvals have been to only local game titles.

“Based on historical precedent, we do expect to see the first batch of imported titles approved in the near future,” Daniel said, referencing the games that are developed by developers.

Going by the latest acquisition news from earlier in the year, Activision Blizzard (NASDAQ: ATVI), now wholly owned by Microsoft Corporation (NASDAQ: MSFT), is set to provide a more challenging competition to local Chinese titles, and the world at large.

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.