The NetEase Games booth at the China Joy conference in Shanghai on July 30, 2021.
Arjun Kharpal | CNBC
GUANGZHOU, China – Major Chinese gaming actions met on Wednesday despite new rules restricting playing time for under-18s.
On Monday, Chinese regulators announced that minors could only play online games for three hours a week, a dramatic tightening of previous regulations.
Investors have dismissed concerns and continued to buy some of China’s top gaming names.
Shares of Bilibili listed in Hong Kong closed up 6.25% more and NetEase rose 6.42% on Wednesday. Meanwhile, Tencent rose 1.5% during the day. Shares of Huya, which is listed on the US, closed up 7% on Tuesday.
Companies and analysts have said the new regulations are unlikely to have a major financial impact on China’s gaming companies.
NetEase said Tuesday that less than 1% of its revenue comes from under-18s. Gaming is NetEase’s biggest revenue business. Investment bank analysts Jefferies said in a note this week that they estimate approximately 5% of Tencent’s gaming revenue comes from under-18s.
Last month, gambling regulations were revived, when a Chinese state-run publication affiliated with the official Xinhua newspaper published an article calling the game “opium.”
The story was later withdrawn and republished with references to the drug removed, suggesting that it may not have fully aligned with Beijing’s thinking.
The regulations on the gaming sector are not new. The Chinese government has long been concerned about addiction and eye problems among young people.
In 2018, regulators froze approvals for new games that reached companies like Tencent and NetEase.
Sometimes the giants of China have tried to avoid regulators by putting policies before regulations. In July, Tencent said it would require players to do a facial recognition scan on the phone to verify if they were adults, so children could not do without restrictions on their playing time.