Tencent's stock soars after China lifts its eight-month ban on games.
Tencent Holdings Ltd. jumped more than 5% after regulators approved the country's first batch of new games in more than eight months. The rest of China's gaming industry went up, too.
An earlier report from Bloomberg News said that the National Press and Publication Administration had posted a list of 45 domestic titles on its website late Monday, which it did so to back up that report. It was clear that Tencent and NetEase Inc. were missing from a line-up of mostly casual games, but Beijing's long-awaited resumption of licensing put an end to fears that it was going to crack down on the gaming industry.
Analysts think that Tencent and NetEase will get their games approved at some point. Tencent was also not included in the first batch of games that were licensed in 2018.
About three weeks ago in Hong Kong, Tencent made the most gains in a single day than any other company. It rose up to 15% for Bilibili Inc., and NetEase rose more than 6%. Shares of video platform DouYu International Holdings Ltd. went up 2.4% in US trade today.
Game approval in China has been restarted, a Citigroup analyst said in a note. "This is good news for the Chinese games industry." Investors will be more confident that the government is still interested in the cultural and innovative aspects of the games industry, which will help them believe that the government will be more likely to approve games on a more regular basis.
Beijing's tech crackdown, which has affected everything from e-commerce to fintech and even online education, spread to online gaming in August when regulators took strict steps to limit play time for minors and set new rules to stop addiction.
The media watchdog has also been looking at new titles to see if they meet stricter standards for content and child protection, Bloomberg News says. This has slowed the release of new titles.
The games that were approved on Monday were all made by domestic companies, like a game made by Baidu Inc., a game made by XD Inc., and a game made by iDreamSky Technology Holdings Ltd. 37 Interactive Entertainment and Youzu Interactive Co. were also on the line-up for the event.
Five of the 45 games that have been approved are for PC, one for the Nintendo Switch console, and the rest are for phones and tablets. Many of them look like casual games with low player costs.