China Discloses Resolving Children's Video Gaming Addiction, But Uncertainty Still Looms For Tencent and NetEase

China’s top gaming industry association declared resolving the problem of children’s video gaming addiction in a report co-authored by Beijing-based research body CNG, the Financial Times reports.
China’s Game Industry Group Committee reported that 70% of minors played less than three hours of games a week.
Beijing, in August 2021, restricted children to only playing online video games after state media highlighted the mental and physical health toll gaming addiction was having on China’s youth.
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The time spent by children on Chinese internet giant Tencent Holding Ltd’s TCEHY games has plummeted since the regulation change and was down 92% in the third quarter compared with the same period last year.
In September, Tencent won its first license for a new gaming title since June 2021.
“From the start of next year, we expect to see gradual and more regular approval of gaming licenses,” said Cui Chenyu, a gaming analyst at Omdia.
“The total number of games receiving approval will be lower than before the policy change,” she said. “Foreign games will face stricter censorship than before.”
Tencent and Chinese gaming company NetEase Inc NTES have pivoted to focus on international expansion following curtailing of minors’ gaming time.
In recent months, both have invested in foreign game publishing houses.
Cui noted the two groups were also seeking to “leverage their gaming technology” and “cash flow from gaming” to develop metaverse-related technology such as virtual-reality glasses and cloud services.
“This is in line with the government policy. It’s a new direction. We don’t know how it will impact financial results,” she added.
Price Action: NTES shares traded lower by 1.22% at $65.47 on the last check Tuesday.