Tencent, Nexon soar after approval for marquee game
TENCENT Holdings and Nexon surged after Chinese regulators approved their Mobile DnF game, green-lighting a long-anticipated marquee title that had failed to pass regulatory muster for years.
Tencent, which developed the title jointly with its Korean partner, gained as much as 5.9 per cent on Friday (Feb 2) in Hong Kong, its most since July. Nexon traded limit-up in Tokyo, set for a record daily of more than 20 per cent.
The title’s approval is a big boost for Tencent’s 2024 pipeline, which still relies in part on years-old titles and is hungry for new blockbusters. The Chinese company had counted on the title to bolster its pipeline as far back as 2020, but the game failed to emerge at the height of a Beijing regulatory crackdown. Nexon said at the time it was delaying the title to comply with restrictions aimed at curbing addiction and playtime among Chinese minors.
DnF or Dungeon & Fighter contributes an estimated quarter of Nexon’s sales, and its launch in China will likely help power up the franchise, Bloomberg Intelligence said.
“We view this as a positive surprise as this title is highly anticipated by the market,” Jefferies analyst Thomas Chong wrote.
More broadly, the approvals – which included several Nintendo Switch titles – suggest business as usual in the world’s largest gaming arena, at a time when concerns linger about regulatory intentions.
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In December, the industry regulator spooked investors by proposing a plethora of regulations that appeared to signal its intention to sharply enhance oversight, in particular a cap on in-game spending that it never specified or clarified.
The watchdog has since signalled its intention to hear the industry out and possibly roll back some of the harsher edicts, though officials have made no promises. The feedback period for the draft rules ended Jan 22 and a final version is expected soon. BLOOMBERG
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