Bloomberg reports that the value of China’s largest gaming companies, Tencent and NetEase, fell drastically during a day-to-day sale of securities, resulting in losses of more than $ 60 billion between the two. To put it in perspective, there are eight times what Microsoft spent on Bethesda Softworks ’parent company, Zenimax Media last fall and $ 15 billion more Robloxinitial valuation earlier this year.
It seems that investors were scared by China’s growing regulations on its video game industry. In addition to putting restrictions about the amount of time children under the age of 18 can play in the country, according to Chinese state media Xinhua News Agency indicates government officials met with industry executives on Wednesday. During this meeting, officials he directed them to avoid a “solitary approach” to profits, who argued that they can lead to design mechanics that promote addiction in minors.
“Authorities ordered companies and platforms to better examine the content of their games,” Xinhua added. “Violent and obscene content and those that generate unhealthy trends, such as money laundering and effeminacy, should be eliminated.”
South China Morning Post he also points out that China is slowing down the issuance of licenses for new online games, which must be approved by government regulators before publication. The China National Press and Publications Administration, which manages these licenses, has not yet provided the list of titles approved for August, breaking with the tradition of disseminating this information quickly at the end of each month.
State-owned newspaper The economic information newspaper (which, as it turns out, is published by the aforesaid Xinhua News Agency) denied the effects of the game on Chinese youth in early August, equating the hobby with “spiritual opium.” Like current events, these statements were seen as a reflection of the Chinese government’s sentiment and caused investors to withdraw from the thriving gaming industry for a while.
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This volatility may be part of the reason why Tencent has spent much of 2021 so far investing in foreign video game studios (and sometimes buying them outright). The massive company has recently acquired stakes of various sizes in developers such as Klei Entertainment, Dontnod Entertainment, i Bohemia Interactive, i he even made a $ 1.3 billion offer for Sumo Group outside the UK.
“We believe in healthy play and take the physical and mental health of children very seriously,” Tencent said. Bloomberg rather today. “We appreciate the guidance and instruction of the relevant regulators and will work hard to fully comply with all rules related to youth gambling addiction and content regulation.”