China’s Regulations Aim to Limit Spending in Online Games; Sharp Decline in Tencent and NetEase Stocks

Impact of Recent Chinese Regulations on Gaming Industry Giants

Recent regulatory measures in China, aimed at limiting expenses and time spent on online gaming, have caused a drastic downturn in the stock prices of industry giants, Tencent and NetEase.

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Implications of China’s Stricter Video Game Controls

These measures, part of a broader campaign to control video game content, have banned daily login rewards and repeated spending, directly impacting the basic mechanisms of “free to play” games.

Tencent and NetEase Stock Plunge Following Restrictions

Tencent, the world’s largest game producer, saw a decline of up to 16% in its shares, while NetEase experienced a fall by as much as 25%. These limitations are a continuation of Beijing’s policy to reduce the impact of games, which have been previously labeled as “spiritual opium” by state media.

Challenge for China’s Online Gaming Industry

The Chinese online gaming industry, the largest globally with last year’s revenue of 45 billion dollars, is now facing a significant challenge.

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