(Yicai Global) June 8 -- Tencent Holdings, the world’s biggest video games company, and its rival NetEase were not among the holders of 60 gaming licenses issued by the country’s media watchdog yesterday. US-listed Chinese game ecology companies saw their stocks price soar as the country’s game industry regulatory environment gradually returns to normal. 

The National Press and Publication Administration released 60 licenses for gaming titles yesterday. Migu Interactive Entertainment, under telecoms giant China Mobile, and Changyou.com, a unit of Internet company Sohu, were among the lucky recipients. This is more than the 45 the regulator issued in April, but less than the 87 released in July last year.

Blibili’s share price [NASDAQ:BILI] surged nearly 10 percent to close at USD28.03 yesterday, Huya [NYSE:HUYA] jumped 5.34 percent to finish at USD4.50 while DouYu [NASDAQ:DOYU] advanced 3.25 percent to finish the day at USD1.27. NetEase [NASDAQ:NTES], meanwhile, edged up 0.05 percent to reach USD103.50. Tencent [HKG:0700] was trading up 4.68 percent at HKD348.80 (USD44) as of 12 noon China time today.

New licences used to be issued every month but things changed last year when authorities began to tighten up regulation of the market. Last August, new rules were introduced cutting the amount of time minors can spend on online gaming to three hours a week in a bid to curb ‘youth video game addiction.’ Since then online gaming firms can only allow under-18s to play between 8 p.m. and 9 p.m. on Fridays, Saturdays and Sundays as well as on public holidays.

The stricter issuing of game licenses has become an inevitable trend and the strengthening of standards means that there is no longer a regular timetable for license granting, said Zhang Shule, an analyst of the Internet sector. But so long as there are permits being issued, the gaming sector can continue to exist as the market space of high-quality games will not be affected. The strengthening of regulation will ensure that games are of a better quality, he added.

It is quite reasonable for gaming licenses to first be issued to smaller developers, as with little reserves they face a crisis in short-term cash flows without the permits, whereas larger game publishers that already have a number of titles on the market can tide over these times quite well, Tencent senior management said at the first quarter earnings call. The Shenzhen-based company also missed out on the April batch of licences.

Editor: Kim Taylor