China softens stance on video game industry after $80 billion market collapse

China has approved 105 video games from local publishers at once. Among them are games published by Tencent Holdings Ltd. and NetEase Inc, reports Bloomberg.

The measures come after Chinese regulators recently announced a series of new rules aimed at limiting the costs and rewards that encourage video game players.

The new rules prohibit rewarding players if they log in every day, if they spend for the first time, or if they spend several times in a row. In addition, game developers were obliged to set limits on how much players can replenish their digital wallets to spend in the game.

All of this immediately affected the market, with Tencent Holdings’ shares falling by 16% and NetEase’s by 25%. The Chinese video game market almost instantly lost about $80 billion in market value.

After that, the Chinese regulator stated that it would listen to feedback from stakeholders, including companies and players, to improve the rules. The decision to approve 105 video games is considered evidence that Beijing is softening its position on the issue.