Days after its gaming stocks were hammered by anticipated measures to reduce spending on video games, China reportedly dismissed an official from a government committee that oversees its press and publishing regulator.
According to a Reuters report, five individuals who were informed on the topic said that Feng Shixin was fired last week from his role as chief of the publishing arm of the Communist Party's Publicity Department.
The enormous video game industry in China is regulated by the National Press and Publication Administration (NPPA).
Feng Shixin's Dismissal
The five sources said that the regulations published by the NPPA last month, which caused a precipitous decline in stock prices in the world's biggest video games sector, including industry behemoth Tencent, had to do with Feng's dismissal.
Sources were reluctant to be named since Feng's departure had not been formally announced by the authorities.
Recently, Feng has spoken on behalf of the Chinese government at events about their attempts to control the sector, such as the approval of new games and a requirement that players verify their true names. The length of time he had been with the company was unclear.
Latest Planned Regulations
The proposed policies of the NPPA aimed at reducing expenditure and the usage of rewards that promote gaming. This caused China's two largest gaming businesses to lose about $80 billion in market value, as worries of regulators once again harshly clamping down on the industry surfaced, Reuters reported.
A number of analysts have voiced their concern that the plans have re-emphasized the dangers of possible regulatory changes, which has weakened investor confidence just as Beijing is attempting to encourage private investment to revive its flagging economy.
Five days subsequent to the announcement of the guidelines, the NPPA adopted a more accommodating stance, stating that it would enhance them via "earnestly studying" public comments.
Previous Restrictions
In 2021, Beijing severely regulated the video game industry, imposing heavy playing limitations on minors and temporarily halting the approval of new games for almost eight months due to worry about gaming addiction.
As a result of the crackdown, which was part of a broader regulatory tightening across other industries, including technology and property, the Chinese gaming industry had its most challenging year yet in 2022, with total revenue shrinking for the first time.
CGIGC, an industry group, said that the domestic income of the video game market in China increased by 14% to 303 billion yuan (about $42 billion) in 2023, the year in which the sector recovered. That is reportedly 13% higher than the year 2022.
