China’s newly proposed gaming regulations have resulted in the firing a government official following the harsh repercussions of the rules hitting the Chinese gaming industry.

The National Press and Publication Administration (NPPA) proposed measures in December 2023 for its ongoing effort to crack down on its gaming industry by eliminating rewards that would incentivise players to log on and limit player spending.

China has begun it’s crack down on its gaming industry in 2021, due to concerns over gaming addiction, particularly in those 18 and younger. Some of their first controversial rules implemented were time limits on games for minors.

While no measure was officially approved, the meer publication of these proposals cost Chinas biggest game companies Tencent and NetEase around $80 billion off their market values.

According to Reuters and South China Morning Post, five sources revealed that Feng Shixin, head of the publishing unit of the Communist Party’s Publicity Department (CPPD), was removed due to the controversial new regulations.

Remember those video game spending limits that were proposed in China last month?

Well they just fired the guy who was in charge.. 😬

• The proposed changes would have limited video game spending, banning daily login rewards, and more.

• After the proposal was announced,… pic.twitter.com/0OBmXB2Xlq

— KAMI (@Okami13_) January 3, 2024

While it’s unclear what exactly caused Shixin to be let go, due to the CPPD overseeing the NPPA, it’s highly likely that the Chinese government sees the CPPD partly responsible for the negative reaction the regulations received, as well as its result.

Shixin’s removal has resulted in a rebound in Tencent and NetEase’s shares, and will continue to do so as China softens its stance on those newly proposed regulations.