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In December, the Chinese government released draft new regulations aimed at curbing excessive spending and time wasting in video games. Shares of the industry's biggest players: NetEase and Tencent, which generate 100% and 50% of their operating profit from video games, fell slightly on the news, but were bought back.
Firstly, this is still a draft document and is likely to undergo changes after consultation.
Secondly, having rules will only strengthen the position of the big players in the market and create additional barriers for new ones.
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