China regulator removes draft video game rules from website; shares jump

By Josh Ye

HONG KONG (Reuters) – China’s gaming regulator has removed from its website rules it proposed last month aimed at curbing spending and rewards that encourage playing video games, checks by Reuters on Tuesday showed, in a move that boosted gaming company shares.

The link to the draft rules on the National Press and Publication Administration’s (NPPA) website was inaccessible as of Tuesday morning, after having worked on Monday.

The consultation period on the rules, which sparked market turmoil when they were first announced, expired on Monday.

The removal was described by analysts as unusual, with some saying a revision could be in store. The NPPA did not immediately respond to a request for comment for the reason for the removal.

Xiaoyue Hu, an analyst at Haitong Securities, said in a note to clients reviewed by Reuters that the removal of the announcement could signal “there might be further changes in the new measures.”

Hu said previous regulatory measures seeking opinions had a track record of staying on the government’s websites even after the consultation period ended.

Shares in Tencent Holdings, the world’s biggest gaming company, and its closest rival, NetEase rose by more than 6% against a 3.4% increase in Hong Kong’s Hang Seng index.

The draft rules, which proposed setting spending limits for online games, had sparked panic among investors, wiping off nearly $80 billion in market value from China’s two biggest gaming companies when they were announced.

But five days later, the NPPA struck a more conciliatory tone, saying it would improve them by “earnestly studying” public views. Earlier this month, Reuters reported that China removed a gaming regulatory official from his post, in a move linked to the rules.

(Reporting by Josh Ye in Hong Kong; Additional reporting by Xu Kaiwen in Shanghai and the Beijing newsroom; Editing by Tom Hogue and Jamie Freed)