Tencent fails to win game approval as China concerns persist

Although absent from the list, Tencent and NetEase will benefit from the resumption of gaming approvals. — AP

China approved its third batch of new games this year, but Tencent Holdings Ltd again failed to make the list, which traders watch to gauge Beijing’s intentions for the world’s largest mobile entertainment arena.

There were no Tencent games among the 67 titles approved by the National Press and Publication Administration in the group of licenses granted this week. The WeChat operator had missed out on two previous rounds that started April, when regulators resumed publishing regular lists of approved titles following a months-long suspension. Titles by smaller rival NetEase Inc were also absent.

ALSO READ: China approves 60 new games, sparking hopes tech crackdown is ending

Tencent-backed mobile gaming developer iDreamsky’s Eternal Return was among the titles that won approval. Other titles included ByteDance Ltd’s role-playing mobile game Crystal Of Atlan and Bilibili Inc’s F.I.S.T.: Forged In Shadow Torch for PC and consoles.

“We believe the two consecutive months of approvals should allay market concerns about industry trends,” wrote Jefferies analyst Thomas Chong in a note to investors. Quality content will be a “crucial factor for new games to be released in the future”.

ALSO READ: Tencent shuts game streaming site after China blocks merger

Although absent from the list, Tencent and NetEase will benefit from the resumption of gaming approvals. Game broadcasting platforms Huya Inc and Douyu International Holdings and short-form video platform Kuaishou Technology will also be helped by more content-driven traffic, he wrote.

Beijing’s tech crackdown – which ensnared sectors from ecommerce to fintech and even online education over a tumultuous year – spread to gaming in August, when regulators introduced stringent measures such as capping play time for minors and imposed other requirements aimed at curbing addiction. The media watchdog has since been reviewing new titles to determine whether they meet stricter criteria on content and child protection, slowing rollouts, Bloomberg News has reported.

ALSO READ: China ends video game freeze by approving first titles since July

Concerns persist about the long-term viability of holding shares in Chinese Internet and gaming firms, following a year of unprecedented scrutiny from Beijing. Investors have been watching regulators’ moves to decide when to re-enter the market. – Bloomberg

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