China's Gaming Regulations Cause Market Turmoil; Key Official Removed

The National Press and Publication Administration signals potential revision of proposed regulations following backlash.

China's National Press and Publication Administration (NPPA) proposed new regulations on video games, causing a massive sell-off in gaming stocks and wiping nearly $80 billion off the market value of China's two largest gaming companies, Tencent and NetEase.
The proposed regulations included spending limits on games, banning daily login rewards, and restrictions on in-game spending, causing fears of a wider crackdown on the gaming industry.
In response to the backlash, the NPPA announced it would 'carefully study' public views on the draft views and revise the proposed regulations.
Feng Shixin, the head of the publishing unit of the Communist Party’s Publicity Department, which oversees the NPPA, was removed from his position following the market turmoil.
Shares of Tencent and NetEase have begun to recover following signals that Beijing may revise the proposed regulations.