Tencent and NetEase

China’s New Regulations Slash Tencent And NetEase Market Cap by $80B!

After the new Chinese regulations on gaming last year, many Chinese gaming giants have suffered major losses. So, what are the rules and what’s next for gaming developers and publishers like Tencent and NetEase in China? Keep reading to know more!

So, earlier last month, the Chinese government took major steps to curb gaming time and money spent on video games by its citizens, especially minors. And it wasn’t the first time China had set such rules for the e-sports industry and its users. They slapped playtime limits on the under-18 players in 2021. And even suspended the approval of new games for eight months.

The crackdown finally ended last year, but the regulators have continued to dish out restrictions. The latest ones last December put a cap on in-game spending in China. Titles are also banned from offering probability-based lucky draw features to minors and enabling the auction of in-game items.

How Are Tencent And NetEase Taking It?

The gaming industry already saw a rough patch in 2021 due to the pandemic. Things just got better in 2022 with a 13% revenue boost to $42.6 billion. However, these new rules might mess with the game revenue for most game developers.

The new regulations have spooked investors and sent the market value of Tencent and NetEase on a rollercoaster! The two giants lost a whopping $80 billion combined! Tencent is the world’s biggest gaming company and is known for Goddess of Victory: Nikke, PUBG Mobile and Tower of Fantasy.

NetEase is the publisher of Fantasy Westward Journey and Identity V and also the operator of the Chinese versions of World of Warcraft and Overwatch. On that note, check out some of the titles by Tencent and NetEase on the App Store.

Shares in Tencent Holdings tumbled as much as 16%, while NetEase’s plunged to 25% after the new draft rules were released in December. Several other companies were also impacted by the upheaval. Despite that, companies are optimistic and see a silver lining amidst the storm! Because the regulators are throwing a lifeline by seeking public comments on the rules until January 22, 2024. So changes might be on the horizon soon!

Meanwhile, check out some of our more exciting news on CookieRun: Kingdom Update 4.16 Dropping On January 6th.