Tencent has lost $43B in market value as China proposes new gaming regulations.
Tencent loses $43bn in market value after China proposes new gaming regulations
The corporation behind games like 'Roco Kingdom' and Crossfire' but as one of the biggest gaming companies in China, it will now have to comply with new measures imposed by Beijing to tighten control over the industry.
The trading desk head at one investment bank in Hong Kong told the Financial Times: "This was supposed to be a quiet day before Christmas and now you’ve got big, big [trading] volumes going through. I haven’t seen moves like this in these names before."
In a set of proposed guidelines, the National Press and Publication Administration, China’s gaming regulator, said it would curb excessive consumption and high-priced features on games, as well as require publishers to issue more warnings to users.
According to industry experts, the news has "shocked" those in the business especially after it was noted earlier this year that the company had “centred their attention” on revenue generation from in-game micro-transactions.
Chenyu Cui, a Shanghai-based analyst with Omdia, a technology research group, said: "Everybody is shocked [by the proposed regulations]"