China's potential new gaming rules will hit smaller developers more, analyst says

Group 1 - Proposed gaming regulations in China are expected to impact smaller developers more significantly than larger ones, while also leading to a reduction in overall online advertising revenue [1][2] - Online games are estimated to account for approximately 20% of the online advertising industry's revenue, indicating a direct correlation between gaming revenue and ad revenue [1] - Major game developers, such as NetEase, Tencent, and Bilibili, derive a substantial portion of their revenue from gaming, with NetEase being heavily reliant on this segment [1] Group 2 - The National Press and Publication Administration has recently approved over 100 new domestic games and 40 imported games, suggesting ongoing regulatory activity in the gaming sector [2] - Incentives for daily sign-ins and initial in-app purchases are common strategies used by online games to enhance user engagement and collect valuable user data [2] - The financial impact of the proposed regulations remains uncertain, particularly regarding whether they will apply to new games only or also to existing titles [2][3]