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Chinese regulators may be having second thoughts about online gaming crackdown: Proposed rule changes have been removed from government website

 Flag of China.
Flag of China.

China may be walking back a series of sweeping new restrictions on gaming that were announced in December 2023, as a Reuters report says the country's gaming regulator has removed the proposed rule changes from the National Press and Publication Administration website entirely.

The proposed changes, which apparently appeared without warning to gaming companies, included requiring:

  • Publishers to have their servers located in China

  • The imposition of spending limits in online game

  • A ban on daily login rewards

  • A ban on "live-streaming of heavy tipping within games"

  • A ban on offering "probability-based luck draw features" to minors (so, loot boxes)

The extent and suddenness of the proposal hammered Chinese gaming companies like TenCent and NetEase, both of which saw an immediate, sharp drop in their share prices, and suffered a market value loss of nearly $80 billion between them.

A couple weeks later the Chinese government indicated it was prepared to ease off a bit, saying "it would improve the rules by 'earnestly studying' public views," and reportedly removed the official who was responsible for proposing the changes.

But now the new rules are gone entirely, and in their place stands a 404 error. That's unusual, according to the Reuters report. "It seems officials were caught off guard by the overwhelming negative reaction from investors, businesses, and the public," 86Research analyst Charlie Chai said.

404 error on China's National Press and Publication Administration website
404 error on China's National Press and Publication Administration website

The removal of the proposed changes from the National Press and Publication Administration's website doesn't necessarily mean they're being dropped completely. Haitong Securities analyst Xiaoyue Hu said the removal of the page could signal that "further changes" to the proposed rules are in the works.

But Hu added that previous proposed regulatory changes typically remained on the government's website even after the period of public consultation had changed, which is what makes this takedown notable.

Whatever the reason for the removal or the ultimate outcome to the proposed rule changes, the money people are at least cautiously happy: The share price of both Tencent and NetEase jumped up sharply immediately after the page was taken down.