China dismissed an official from a government group supervising the press and publications regulation, according to five sources briefed on the subject, only days after Chinese gaming stocks were hammered by planned rules to limit video game spending.
According to the sources, Feng Shixin was fired as head of the Communist Party’s Publicity Department’s publishing unit last week. The agency is in charge of the National Press and Publication Administration (NPPA), which controls China’s huge video game industry.
The State Council Information Office, which handles media inquiries on behalf of the Chinese government, including on personnel concerns, did not react quickly to a request for comment, and Reuters was unable to get Feng’s contact information in order to reach him for comment.
According to the five sources, Feng’s dismissal was tied to NPPA rules released last month, which sent stocks in the world’s largest video gaming sector, including industry leader Tencent (0700.HK), plummeting.
Authorities had yet to publicly announce Feng’s departure, so the sources declined to be identified.
What’s Happening To China’s Video Game Market?
In recent years, Feng has represented the Chinese government at events to address the Chinese government’s initiatives to control the business, such as game approvals and real-name verification procedures for gamers. Reuters was unable to determine how long he had been in his current position.
The NPPA’s proposed policies, which seek to limit spending and the use of incentives to encourage video game play, sparked fears that authorities were once again cracking down hard on the industry, wiping over $80 billion off the market value of China’s two largest gaming businesses.
Analysts also said the plans placed the concerns of prospective regulation changes back to the forefront of investors’ minds, undermining confidence at a time when Beijing is attempting to stimulate the economy by increasing private sector investment.
The NPPA struck a more conciliatory tone five days after the regulations were issued, stating it would revise them by “earnestly studying” public feedback.
In 2021, Beijing clamped down hard on its video gaming business, imposing severe playtime limitations for under-18s and delaying new video game approvals for nearly eight months, citing gaming addiction worries.
The crackdown was part of a broader regulatory tightening across numerous industries, including technology and real estate, and resulted in 2022 being the most challenging year on record for the Chinese gambling industry, with total revenue declining for the first time.
According to industry group CGIGC, China’s video game sector returned to growth last year, with domestic revenue increasing 14% to 303 billion yuan ($42.47 billion).
