Tencent and Netease, the Chinese internet giants that dominate the country’s gaming industry, have hit with stock losses amid China’s clampdown on online games.
The Tencent, Netease hit with stock losses amid China’s gaming industry clampdown is a news article about the recent stock losses of Tencent and Netease.
If you’ve been following the gaming business for a while, you’re undoubtedly aware of the significant “freezes” imposed by the Chinese government on new game approvals in 2018 and 2019. The 2018 freeze was especially harsh since it lasted almost a year, forcing companies like Tencent to adopt harsh anti-addiction measures and reduce their marketing budget.
Well, welcome to another round in 2021, while this newest attack on the region’s video gaming sector isn’t quite a freeze, more of a “slow down” for approvals, but it’s having the same impact, as Tencent and Netease alone lost over $60 billion in value this week as a result of the announcement. (It has subsequently recovered somewhat.) Regulators reportedly requested that the businesses concentrate less on earnings and more on preventing kids from becoming addicted.
“The authorities ordered enterprises and platforms to tighten examination of the contents of their games,” Chinese state media announced, adding a few dog whistles in case it wasn’t clear what this was all about: “Obscene and violent content, as well as those breeding unhealthy tendencies, such as money-worship and effeminacy, should be removed.”
Tencent’s stock hasn’t dropped this much since July, according to Bloomberg, ahead of the same state-run news agency’s “spiritual opium” rhetoric and a government crackdown on adolescent gaming.