Shares of the world’s largest gaming company Tencent Holdings, and smaller rival NetEase Inc rose on Wednesday after China’s video game regulator granted the first batch of gaming licenses in 2023, further easing the blow to the industry.
Tencent shares rose as much as 1.7% in early trade before paring gains, while NetEase rose 5.8% to its highest level in more than four months.
The licensing of 88 online games on Tuesday is the latest sign that a regulatory crackdown that began in August 2021 and hammered the world’s largest gaming market is ending.
Unlike most other countries, video games require regulatory approval before being released in China.
The crackdown, aimed at weeding out content the government does not sanction, requires companies to remove violent content seen as celebrating wealth or cultivating celebrity.
In the most vital sign that the crackdown is over, China granted 44 foreign games publishing licenses to distribute domestically last month.
Regulators resumed issuing gaming licenses to local games in April last year, while approvals for foreign games were considered the previous regulatory restrictions to be lifted.