China Removes Official After Proposed Video Game Rules Sent Stocks Tumbling

It was recently revealed that China has removed an official from his post after the draft of new regulations concerning video gaming sent the stock of major Chinese gaming companies tumbling. These rules were intended to curb the spending on video games.

The official in question is Feng Shixin, who was removed last week from his position as head of the publishing unit of the Communist Party’s Publicity Department, according to reporting by Reuters. Said department is responsible for overseeing the National Press and Publication Administration (NPPA), which, in turn, regulates China’s massive video game sector.

As of now, there has been no official announcement as to the reason why Feng was removed. According to Reuters’ sourcers, the removal was linked to the recent announcement of new gaming rules by the NPPA which resulted in stocks falling for the world’s largest video games sector, including industry goliath Tencent.

Feng has become known as the representative of the Chinese government at events that discuss the authorities’ efforts to regulate the gaming industry, including game approvals and, real-name verification requirements for gamers. 

Regarding the new rules, the NPPA’s proposed measures were designed to reduce spending and curb the use of rewards to encourage the playing of video games. This triggered fears that the authorities were once again cracking down hard on the sector. As such, almost US$80 billion worth of market value was quickly wiped off of China’s two biggest gaming companies.

The new rules also brought risks of potentially new regulatory changes, which in turn spooked investors and hurt confidence during a time when China has been trying to boost private sector investment to reinvigorate a slowing economy.

Following the stock tumble, the NPPA said that it would take another look at the rules and will improve them based on public views. This led to a slight rebound in stocks.

Beijing’s big gaming crackdown in 2021 still hangs heavy over the gaming industry as the government had set strict playtime limits for under 18s and suspended approvals of new video games for about eight months, citing gaming addiction concerns.

The crackdown was a part of a wider tightening of regulations across several sectors. It eventually led to a difficult 2022 for China’s gaming sector as total revenue shrank for the first time.