Photo by Li Yang on Unsplash
The Impact of China’s Proposed Gaming Regulations
December 25, 2023
The gaming industry in China is set for a shakeup. Smaller game developers are bracing for a potential blow while the online advertising sector anticipates decreased revenues, says UBS. The recent fall of the shares of gaming giants such as Tencent, NetEase, and Bilibili to their lowest in over a year is an indication of the industry’s apprehension about the draft regulations proposed by China’s National Press and Publication Administration. These regulations intend to put a stop to certain revenue-driving strategies for these companies, like encouraging daily sign-ins for games.
The public can comment on the proposed gaming regulations until Jan. 24, but with Hong Kong’s markets closed for Christmas, responses may come slowly. Larger game developers and high daily active user games could weather these changes better, having more ways to keep players engaged. However, the rules could indirectly affect the ad industry, as it heavily relies on online games for about 20% of its revenue. This impact could be particularly significant for companies like NetEase, Tencent, and Bilibili, for whom gaming is a major revenue source.
Many other companies, from well-established giants to smaller startups, are involved in game development and publishing in China. But in recent years, the Chinese government’s desire to limit gameplay, especially among young players, has been increasingly clear. Encouraging daily sign-ins and offering benefits for initial in-app purchases are common strategies to boost user engagement and gather crucial user statistics, enabling developers to make adjustments to games as needed.
Yet, it’s challenging to estimate the financial implications of these draft rules due to the uncertainty over whether they would apply only to new games or affect existing ones as well. Interestingly, despite the looming regulations, the National Press and Publication Administration has recently approved over 100 new domestic games and 40 imported ones.
Recent News
Media Giants Depend on Sports As Content Shortages Rise
As Hollywood emerges from last year’s strikes, major media companies are turning to live sports to attract audiences and advertisers. This trend was evident during this year’s Upfront presentations, where media giants showcased their upcoming content and advertising opportunities.
New Trader Joe’s Opens in SF After 10 Years
San Francisco’s Hayes Valley neighborhood welcomed a highly anticipated new addition on May 17, 2024, with the grand opening of a Trader Joe’s at 555 Fulton St., on the corner of Laguna Street. This event marks the end of a decade-long wait for residents who have been eagerly looking forward to a new grocery store in their area.
China’s Property Market Boost: Stocks Surge, Copper Hits Highs
The Chinese government unveiled a comprehensive support package that has sent ripples through financial markets. This initiative includes a slew of measures aimed at stimulating housing demand and addressing the excess inventory burdening developers. The immediate impact was a significant rally in Chinese stocks and a surge in commodity prices, notably copper, which hit record highs.
Mercedes-Benz Workers in Alabama Reject Union
In a pivotal moment for autoworkers in the southern United States, employees at a Mercedes-Benz plant in Alabama have voted against joining the United Auto Workers (UAW) union. The outcome, with 56% of workers voting against unionization and 44% in favor, comes as a significant setback for the UAW’s efforts to expand its influence in the region.