China’s moratorium on gaming approval regulation is putting small companies and developers off, according to the report conducted by the equity firm Tonghai Securities. Major developers like Tencent and NetEase were also badly affected in terms of financial return. Nevertheless, risks for them can be mitigated as overseas game titles are not affected. The signal sent by the government is clear – discouraging companies from entering this potentially lucrative market because it could well result in the unwelcome outcome of causing people to overly indulge in gaming activities. Instead, they should be diverted from the trend by a regulatory clampdown and invest in “healthier businesses”.
