2023-12-22 18:30:00
Chinese Gaming Stocks Plummet as Government Cracks Down on Online Purchases
The Chinese government has issued new regulations restricting consumer internet purchases of gaming, sending shockwaves through the gaming industry. The move has resulted in a major drop in the stock prices of leading gaming companies in China.
Tencent, the most prominent player in the Chinese gaming world, saw its stock plunge by 12% in Hong Kong, wiping out a massive $45 billion in market value. Netize, another major player, also saw its share fall by 25%, resulting in a loss of approximately 16 billion dollars in value.
Bilibili, a large video game platform in China, also saw its shares fall by 10%, contributing to a total loss of Chinese shares related to the gaming industry of over 100 billion dollars in a single day.
The concern is clear – the new regulations limiting online purchases of gaming are expected to significantly reduce consumer spending and impact the revenues of gaming companies.
One of the key instructions from the administration is the prohibition of features that encourage in-game sales, which are often addictive and drive players to make purchases to advance in the game. This has been a common practice in the gaming industry, and the Chinese government is taking a strong stand against it.
Additionally, gaming gurus will be prohibited from giving tips during games, and players will be required to use their real names while playing.
This crackdown comes as the Chinese government continues to express concerns about the addiction of young people to gaming. Just two years ago, the government banned players under the age of 18 from playing on weekdays and limited gaming time to three hours per day.
The gaming industry in China is now facing significant challenges as it navigates the new regulations imposed by the government. The impact of these regulations on the industry and the broader economy remains to be seen.
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