Chinese regulators summoned gaming companies including Tencent Holdings Ltd (騰訊) and Netease Inc (網易) to discuss further oversight of the industry and the need to de-emphasize profits, prompting a steep share selloff.
Tencent, the country’s largest gaming company, dived as much as 6.7 percent, on track for its biggest fall since July, while smaller rival Netease fell as much as 7.7 percent.
The Publicity Department of the Chinese Communist Party’s Central Committee, the National Press and Publication Administration, along with two other agencies, called the meeting to convey plans to step up supervision and start checks on illegal behavior, Xinhua news agency said.
Photo: AFP
The government last week released new regulations for the industry, including limiting the amount of time children can play video games to three hours a week.
The agencies told the companies they must enforce the new regulations and break from “the solitary focus of pursuing profit” to prevent minors from becoming addicted to games.
They should also remove “obscene and violent content” and avoid “unhealthy tendencies, such as money-worship and effeminacy.”
“The authorities ordered the enterprises and platforms to tighten examination of the contents of their games,” Xinhua said. “The platforms must also resist unfair competition to prevent excessive market concentration or even monopolies in the industry.”
Chinese gaming stocks listed in the US tumbled with Bilibili Inc sliding 5.9 percent. The NASDAQ Golden Dragon China Index slumped 3.3 percent.
Netease said in a statement that it would comply with anti-addiction regulations and promote more quality games for minors.
“We believe in healthy game play and take very seriously the physical and mental health of minors,” Tencent said in a statement. “We appreciate the guidance and instruction from the relevant regulators, and will work hard to be in full compliance with all rules relating to youth game addiction and content regulation.”
The South China Morning Post has further reported that Chinese regulators plan to temporarily freeze approvals for all new online games, contributing to the major hit to Tencent and Netease.
However, Xinhua made no mention of suspending gaming approvals in its reports.
China in 2018 froze approvals on game monetization licenses for months, in part to combat addiction and myopia among children.
That spurred Tencent’s first profit drop in at least a decade and helped wipe about US$200 billion off its market value at one point.
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