China’s gaming regulator proposed new laws for the industry last month. These drafted policies were aimed at minimising the spending and rewards that encourage video games. The rules reportedly caused panic among investors and wiped off nearly $80 billion in market value from two of the biggest gaming companies of the world’s largest gaming market.
According to a report by the news agency Reuters , the regulator has removed the newly proposed rules from its website to boost gaming company shares.The link report notes that the draft rules on the National Press and Publication Administration’s (NPPA) website were inaccessible. The consultation period on the rules (which sparked market turmoil when they were announced) also expired on Monday (January 22).
Shares in Tencent Holdings, the world’s biggest gaming company, and its closest rival, NetEase, have also grown after the rules were removed.
Earlier, analysts noted that the plans brought the risk of potential regulatory change back in the minds of investors. This hurt their confidence at a time when the government has been trying to boost private-sector investment to spur a slowing economy.
Soon after proposing the new gaming rules NPPA said that it would improve them by “earnestly studying” public views. Earlier this month, in a move linked to the rules, China also reportedly removed a gaming regulatory official from his post.
Analysts claimed that two of the most contentious articles in the proposed rules were articles 17 and 18. In December 2023, the NPPA acknowledged concern over those articles and analysts said there was a possibility they could be removed or changed.
Article 17 was aimed at banning video games from forcing players into combat. This proposed law confused the industry as combat is the key part of most of the contemporary multi-player games.
Article 18 required games to set a spending limit for players. It also banned features that incentivise players to spend in the game.
What analysts said about China’s proposed gaming laws
As per the report, analysts believe that the removal of China’s new proposed gaming rules was unusual. While others said that the regulators may share a revised version of the proposed laws in the coming days.

In a note to clients, Xiaoyue Hu, an analyst at Haitong Securities, said 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.
Ivan Su, an analyst at Morningstar said, “Our base-case view expects the government to remove Article 17 (prohibition of mandatory player-versus-player) and 18 (imposing spending limit) from the final rule.”
Charlie Chai, a Shanghai-based analyst at 86Research, said regulators have been working to contain the fallout of the proposed rules.
Chai said: “It seems (government) officials were caught off guard by the overwhelming negative reaction from investors, businesses, and the public.” He also added that the government has since “moderated its stance (and labelled) the proposal as negotiable”.