Chinese government cracks down on game and VR investments

Chinese government cracks down on game and VR investments

According to news coming out of China, the country's financial regulator has cracked down companies making investments in online and mobile games.

The moved - reported by business outfit Caixin - comes as the Chinese government is struggling to handle largescale volatility on stock exchanges, and - more generally - a rebalancing of how the country invests in economic activity.

As well as games, investments in film and tv, internet finance, and VR are also being banned as being speculative and not related to the "real economy".

Burst the bubble

The thinking behind the move seems to be linked to large sums of cash that Chinese investors and banks have been spending in startup companies in these four fields.

Games and VR investments are being banned as speculative and not related to the real economy.

Film and tv seems to be a particular issue, but as we've pointed out, there have been some odd acquisitions in gaming too, which most recently have seem the likes of China Mobile Games and Entertainment Group Limited bought by an auto part manufacturer for $1 billion.

You can read some other interesting deals here - M&A the Chinese way: 5 surprising acquisitions of game companies.

However - and ironically - over the past year, many Chinese game companies have delisted from the US NASDAQ exchange, either going private or relisting through complex takeover bids on the Shanghai or Shenzhen exchanges.

This new situation may hit their future plans, although it's not yet clear whether this is just a temporary move.

Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.