China ousts official amid gaming regulation upheaval

Amidst mounting concerns over China’s gaming sector regulations, a significant leadership change within the country’s media oversight has sparked industry-wide speculation.

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Photo courtesy: Phil Whitehouse / Flickr

China witnessed a significant shift within its media regulatory landscape amid recent turmoil in gaming stocks following proposed regulations targeting video game expenditure.

Reports confirmed the removal of Feng Shixin from his role as head of the publishing unit in the Communist Party’s Publicity Department, which oversees the National Press and Publication Administration (NPPA). This development emerged in the wake of controversial measures introduced by the NPPA that significantly impacted major players in the gaming industry, such as Tencent (0700.HK).

Despite the attention drawn to Feng’s departure, the State Council Information Office, responsible for addressing media queries regarding Chinese government affairs, refrained from commenting on the personnel change. The abrupt shift in leadership coincided with concerns over the sector’s trajectory, with regulatory discussions sparking uncertainties among investors about potential ramifications for the gaming industry’s future.

Feng, recognized as a representative figure in discussions pertaining to industry regulations, saw his removal align with the rollout of contentious rules aimed at curbing video game-related expenses and incentives. The repercussions were swift, with the market value of China’s leading gaming companies plummeting by an estimated $80 billion, prompting speculation and unease among stakeholders.

While the NPPA’s initial stance created waves, signaling stringent regulations, the agency later adopted a more receptive approach by expressing a willingness to consider public feedback. This cycle of regulatory dynamics mirrored past crackdowns on gaming activities, including the imposition of playtime limitations and a freeze on new game approvals for an extended period.

China’s regulatory landscape, marked by stringent measures across diverse sectors like technology and property, has consistently impacted investor confidence. This uncertainty coincides with Beijing’s efforts to invigorate its economy through increased private sector investment amid concerns of economic deceleration and threats of economic sanctions against Taiwan.

Amidst the challenges faced in 2022, the Chinese gaming industry showcased signs of recovery in 2023, witnessing a growth surge with domestic revenue escalating by 14%. This growth trend hints at a potential resurgence for the industry following a phase of stringent regulatory scrutiny and uncertainty.

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