New Chinese Online Gaming Regulations Send Tencent, NetEase, and Other Gaming Stocks Crashing
China, earlier today, brought into effect new online gaming and gambling regulations, which aim to curb down the time spent by gamers online, and remove all incentives to play daily, by regulating the way games reward gamers to play daily or often, causing them to spend more time and money online. The announcement sent shockwaves through the financial markets, causing investors to drain about $80 billion in value from two the leading online gaming stocks, Tencent and NetEase. The regulations essentially set spending limits for online games, by spelling out the exact ways in which game studios can monetize their online experiences and play reward systems. Tencent lost about 16% in share price, while that of NetEase crashed by 25%. Prosus, which owns a 26% stake in Tencent, slid by 14.2% in the markets. This is expected to have an effect on Western markets that open for trading in a bit.