China is once again looking to impose tighter regulation on its video game market.

The country's entertainment and content regulator, the National Press and Publication Administration, has released proposed legislation that would see games companies limited in how they could incentivise players to log on to their titles. This includes banning rewards for logging in every day.

Furthermore, the draft legislation demands that games companies have their server hardware within China, as well as saying that games should not feature state secrets or pose a danger to national security.

As a result of these proposed changes to how games businesses in the country, several big names such as Tencent and NetEase have seen big hits to their share price. The former has see a 12.4 per cent dive – its biggest drop in a single day – while the latter has fallen by 24 per cent.

As reported by the FT, Tencent VP Vigo Zhang said that this proposed legislation represents “no fundamental changes” to how it operates as a company.