China granted for the second time this year new licenses of video games after a months-long freeze in the world’s largest market, a decision seen as a positive signal for the tech giants. The sector has been under pressure for months from Beijing, which has multiplied the blows against powerful internet companies, fined for competition and personal data issues.
Video games, a financial windfall in China
The sector decried for their addictive side among young people, has not been spared by this takeover. Beijing had frozen any new license for nine months, which had weighed on the profitability of the Chinese heavyweight Tencent. On Tuesday, 60 new video games were licensed in China after an initial batch in April, the press and publication administration said.
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Tencent and its competitor NetEase (to whom we owe the very recent Diablo Immortal ) have however not obtained any license, unlike local studios such as Perfect World or miHoYo, publisher of the popular game Genshin Impact.
Companies go back on the stock market
The green light from Beijing caused technology stocks to jump on Wednesday, with the hope of a patching up with this sector which has been under pressure for months. Tencent stock gained more than 6% on the Hong Kong Stock Exchange, while NetEase gained more than 5%. The e-commerce champion Alibaba, which had been the first to suffer the punishment of the authorities, ended up up more than 10%.
In August, the authorities imposed a drastic limit of three hours of play online video per week to under 18s, while some could spend days glued to their screens.
Regulatory uncertainties have weighed on the profitability of tech giants: Tencent thus reported last month of sluggish quarterly growth, unheard of since 2004. Threatened by an economic slowdown, the communist power seemed however to put some water in his wine in recent weeks. Beijing affirmed its support for the digital economy in April and received several bosses in the process.