China Publicity Chief Axed After Gaming Rules Stock Meltdown

China has removed a government publicity chief from his post just days after new gaming spending rules were announced that sent stocks in the world’s largest video games sector, including industry giant Tencent, plunging.

Sources say Feng Shixin was removed last week from his position as head of the publishing unit of the Communist Party’s Publicity Department. The department oversees the National Press and Publication Administration (NPPA) which in turn regulates China’s vast video games sector.

The sources said Feng’s removal was linked to rules the NPPA announced last month that triggered fears that authorities were once again cracking down heavily on the sector and wiped nearly $80 billion off the market value of China’s two biggest gaming companies.

Analysts also said the plans brought the risks of potential regulatory changes back to the fore in the minds of investors, hurting confidence at a time when Beijing has been trying to boost private sector investment to spur a slowing economy.

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Five days after the rules – which seek to curb spending and the use of rewards that encourage the playing of video games – were announced, the NPPA struck a more conciliatory tone, saying it would improve them by “earnestly studying” public views.

Beijing cracked down heavily on its video gaming sector in 2021, setting strict playtime limits for under-18s and suspending approvals of new video games for about eight months, citing gaming addiction concerns.

The crackdown was part of a wider regulatory tightening across several sectors, including technology and property, and led to 2022 being the Chinese gaming industry’s most difficult year on record as total revenue shrank for the first time.

China’s video game market returned to growth last year as domestic revenue rose 14% to $42.47 billion, according to industry association CGIGC.

Reuters with additional editing by Sean O’Meara

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Sean O’Meara

Sean O’Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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