Gaming stocks experienced a collective rise in Hong Kong trading. At the time of writing, NetEase-S (09999) was up 5.34%, trading at HK$189.4. TENCENT (00700) increased by 3.39% to HK$519. IDREAMSKY (01119) rose 3.09% to HK$0.5, while IGG (00799) advanced 1.32% to HK$3.08. The surge follows an announcement from Alphabet, the parent company of Google, regarding a systemic overhaul of the Google Play store. The standard service fee for in-app purchases will be reduced from the long-standing rate of 30% to 20%, while the fee for subscription services will be lowered to 10%. Additionally, the platform will fully open to third-party payment systems and third-party app stores. A Citigroup research report suggested that Google Play's policy changes could represent a significant milestone for mobile platform fee structures. This development is likely to benefit Chinese gaming companies with substantial overseas mobile publishing operations and may encourage more studios to explore international opportunities. The move could lead to gradual improvements in the gross profit margins for game companies, with the extent of improvement depending on their domestic/overseas revenue mix and platform distribution. The report also expressed belief that other major app stores may follow suit to maintain their competitiveness and openness.
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