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Chinese government games crackdown sees Tencent and NetEase stock plummet

Chinese government games crackdown sees Tencent and NetEase stock plummet

Chinese two biggest games companies, Tencent and NetEase, have lost a substantial amount of money in the wake of the prospect of increased regulation in the region.

As reported by Bloomberg, the duo saw a combined loss in value that clocked in at over $60 billion on the night of Wednesday, September 8th. Apparently, execs from both Tencent and NetEase were summoned to a meeting with industry regulators where they were instructed to stop their "solitary focus" on profit and take steps to ensure kids weren't becoming hooked to video games.

That $60 billion loss is substantial, but the duo has managed to recover some of the value lost in the wake of this news.

Between the close of trading on that day and day's end on the Hong Kong Stock Exchange, Tencent's share price has dipped by six per cent – representing a $36 billion (HK$279 billion) dip in market cap. Meanwhile, NetEase's valuation has gone down by $4.7 billion (HK$36.5 billion), an 8.25 per cent drop.

This financial fallout is the result of news that Chinese regulators are freezing approvals for new online games, as reported by the South China Morning Post. This is part of a crackdown on the video games market in the region, with media describing this form of entertainment as "spiritual opium."

The Chinese government's approval body – the National Press and Publication Administration – is bringing restrictions into effect that would stop minors from playing games between Monday and Thursday, with kids allowed to play for one hour a day from Friday to Sunday.


PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site PCGamesInsider.biz. In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for GamesIndustry.biz, VGC, Games London, The Observer/Guardian and Esquire UK.