Gelonhui, January 23 丨 The State Administration of Radio, Film, and Television announced the third batch of game versions, with a total of 93 games. The two major mainland game companies Tencent (00700.HK) and NetEase did not appear on its list, while related games such as 37 Entertainment, China Science and Technology, and Knight Run Network were on the list.

Nomura believes that Tencent and NetEase have not obtained new game versions, causing the market to focus on favoring small game vendors after the restructuring of the State Administration of Radio, Film, and Television. Nomura does not agree with this opinion. The bank believes that Tencent and NetEase will continue to be valued by the authorities because they can produce their own games and meet the requirements of the authorities. At the same time, Tencent has more resources to produce high-quality games, which is believed to be preferred by the authorities.

However, Nomura believes that game regulators need to balance the interests of large companies and small companies. Since they stopped issuing new games last year, more small game companies had operating and capital flow problems, while large companies, such as Tencent, have stable game portfolios that themselves provide stable cash flow, so he explained why small companies were given new game versions first so that they could continue to survive.

Nomura believes that Tencent and NetEase will get new versions in the near future, and Tencent and Ali are still the bank's first choice for long-term investment.