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Chinese Economy Faces Struggles in The New Changed Rules in Gaming Markets

China’s most valuable company, TENCENT holding, accelerated the buybacks and currently holds a record of purchasing HK$10 billion (S$1.7 billion) of shares this December whereas China’s strict gaming guidelines grew stricter with a set of new rules and regulations. These sudden changes caught the investors quite off guard and shocked them to their cores. All the valuable companies and investors witnessed a higher pace in stock investment as the shocking revelations caused almost a 12% dip in the revenue during the festive months of December. TENCENT specifically increased purchases up to HK$1 billion daily, which brings about a high rise compared to the daily purchase of HK $375 million last year. 

Newest rules bring the 2021 horrors

After the changes in the restrictions in the gaming sector, investors are looking back to the 2021 rule changes which almost broke down the online gaming sector in the internet arena. These regulations bring about changes and bans on rewards for frequent logins and the in-games spending and buyings. As a defense Beijing had already taken extreme measures following the rule changes in 2021 as they sacked an official ranked at a top position. Further restrictions regarding online and offline gaming put the game industry and investors under major risks. TENCENT and some of their rival companies operate under one of the strictest rules in the gaming area such as age restrictions to the limitations in the playing time. 

TENCENT holds a significant position in the Chinese economy

Spectators are scared of the repetition of the aftermath of 2021 rule changes as crippled the gaming sector quite a bit. Onlookers fear that further changes actually put the Chinese game industry under irreversible damages. The TENCENT organizations are yet to respond to the communications sent to them by Bloomsberg as many are questioning their decision of stock purchasing as they are located 4% below the position that they held last year. These rule changes can have a significant impact on the recovering economy of China. Chinese President Xi Jinping faced another challenge as he continued to revive the crushing economy of the property sector as well as the tech sector. TENCENT is a valued company as it can have important contributions to the revival of the Chinese economy at the moment of a post pandemic struggle. 

A single ray of hope 

TENCENT president had commented that China is currently facing one of its severy low points in the area of the internet stocks and he considers that buying the stock back can help the company fight against all the odds a little bit. The scenario might improve for TENCENT and their equivalent competitors as China’s game regulators approved almost 105 titles of the video games, which is a pretty higher number than anybody had witnessed in the last 17 months. Although the change of rules took a jibe at the profit markets before Christmas, this still poses as a ray of hope. 

Investors are in deep water due to this unpredictable nature of the Chinese gaming market and China needs the gaming companies to survive to liven their economy further. Experts suggest startups and companies to take decisions strategically during these uncertain times.

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