Days after proposed measures to limit video game spending hurt Chinese gaming stocks, the Chinese government dismissed an official at a body that oversees the press and publishing regulator, according to five people briefed on the case. The sources stated that Feng Shixin was dismissed last week from his role as the chairman of the Communist Party’s Publicity Department’s publishing division. China’s massive video game industry is regulated by the National Press and Publication Administration (NPPA), which is under the department’s supervision.
A request for comment was not immediately answered by China’s State Council Information Office, which responds to media inquiries on behalf of the Chinese government, including those about personnel matters. Additionally, Reuters was unable to locate Mr. Feng’s contact information in order to get in touch with him for a remark. The five individuals said that Mr. Feng’s dismissal was related to the NPPA’s announcement of new rules last month, which caused stocks in Tencent, a major player in the video game business, to plummet.
Since Mr. Feng’s departure had not yet been formally announced by the authorities, the sources chose not to be named. In recent years, Mr. Feng has represented the Chinese government at events discussing attempts by the authorities to control the business, such as game approvals and the need for players to verify their genuine names.
Fears that the government was once again taking harsh action against the video game industry were aroused by the NPPA’s proposed policies, which aim to limit spending and the usage of incentives that promote gaming. As a result, the market value of China’s two largest gaming businesses dropped by around $80 billion.
The policy had a negative impact on the private sector
Analysts said that the proposals damaged investor confidence at a time when Beijing has been attempting to increase private sector investment to revive a flagging economy by bringing the dangers of possible regulatory changes back to the forefront of investors’ thoughts. The NPPA adopted a more accommodating stance five days after the guidelines were unveiled, promising to make improvements after “earnestly studying” public feedback.
In 2021, Beijing severely restricted the amount of time that under-18s may spend playing video games. It also halted the approval of new video games for a period of eight months, citing fears about gaming addiction. The Chinese gaming industry saw its most challenging year on record in 2022 as overall income declined for the first time due to the crackdown, which was part of a broader regulatory tightening across numerous industries, including technology and real estate.
The crackdown was a result of broader regulatory tightening in a number of industries, including technology and real estate, and it made 2022 the most challenging year yet for the Chinese gaming industry, with total revenue declining for the first time. According to industry group CGIGC, China’s video game sector saw a return to growth last year, with domestic sales rising 14% to 303 billion yuan ($42.47 billion).
