What's Going On With Chinese Gaming Stock NetEase On Wednesday?
Tencent Holdings (OTC:TCEHY) and Alibaba Group Holding (NYSE:BABA) have received approval from China for 104 new video games this month, marking a positive shift for the country’s gaming industry.
SCMP reports that the National Press and Publication Administration (NPPA) approved Tencent’s online role-playing game Roco Kingdom: World and Alibaba’s Ruyuan from its Lingxi Games studio.
The update boosted Chinese gaming company NetEase, Inc. (NASDAQ:NTES) stock.
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This month’s approvals reflect a rebound for the gaming industry. After fewer than 100 titles were approved in April and May, more than 100 new titles were approved each month in the first quarter.
According to market intelligence company CNG, China’s video gaming market saw its first-quarter revenue rise by 7.6% year-on-year to 72.6 billion yuan ($10 billion).
The market has been recovering since April 2022, when Beijing resumed licensing video games after an eight-month freeze. In January, the NPPA retracted a draft proposal to cap user spending in games and ban excessive rewards.
China’s unexpected gaming regulations caused a market dip of $80 billion, with Tencent’s value dropping by $54 billion.
Price Action: NTES shares traded higher by 2.91% at $95.75 at the last check on Wednesday.
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