In a surprising turn of events, China appears to be reconsidering its recently announced restrictions on online games after witnessing a massive $80 billion market selloff. The news of these regulations had a detrimental impact on major gaming companies, leading to a significant drop in their share prices.

On Friday, Chinese officials unveiled draft rules aimed at curbing excessive spending by gamers and restricting rewards that incentivize prolonged online activity. As a result, gaming behemoth Tencent witnessed its share price plummet by up to 16%, while its rival NetEase experienced a staggering record decline of 28%. Similarly, shares of popular gaming platform Bilibili plummeted by 14%.

The staggering decline in these three stocks alone resulted in a combined loss of over $80 billion in market value, according to Bloomberg calculations. The impact of China's announcement was not limited to domestic companies, as online games-related shares listed in other countries such as the US and Paris also faced significant losses.

However, in what appears to be a swift reversal, China's National Press and Publication Administration, the regulatory body responsible for the proposed rules, sought to assuage concerns and demonstrate its willingness to listen to industry feedback. In a notice issued on Saturday, the authority stated that it would carefully study the industry's reaction and improve upon the draft rules.

In a potentially encouraging sign, the regulator announced on Monday that it had approved 105 new online games, signaling a potential relaxation of the stringent restrictions. The authority also released an official statement on WeChat, mentioning its "active support for the development of online games."

This recent development follows a series of prior efforts by China to crack down on online gaming. Earlier this year, Beijing implemented a ban on individuals under the age of 18 playing games on weekdays and limited their gaming time to three hours on weekends. These measures were introduced to combat the issue of gaming addiction among young people.

The future of online gaming in China remains uncertain as the authorities continue to navigate the balance between regulation and supporting the growth of the industry. Market observers will closely monitor any updates or revisions to the proposed rules that may impact the gaming landscape in the country.