Shares of Tencent Holdings, the world’s largest gaming company, and smaller rival NetEase rose on Wednesday after China’s video games regulator granted the first gaming licences in 2023, further easing an industry crackdown.

Tencent’s shares rose as much as 1.7 per cent in early trade before paring gains, while NetEase’s stock jumped as much as 5.8 per cent to its highest in more than four months.

The granting of publishing licences to 88 online games on Tuesday is the latest sign that a regulatory clampdown that began in August 2021 and took a heavy toll on the world’s largest gaming market is ending.

Unlike in most other countries, video games need approval from regulators before release in China.

The crackdown was aimed at purging content the government did not approve of, with companies asked to delete content that was violent, deemed to celebrate wealth or foster the worship of celebrities.

Last month, China’s move to grant publishing licences to 44 foreign games for domestic release was the strongest signal that the clampdown was ending.

Regulators resumed issuing gaming licences to homegrown games last April, and the approval of foreign games was seen as the last regulatory curb to be removed.

• Reporting By Anne Marie Roantree; Editing by Jacqueline Wong and Jamie Freed, of Reuters.