'China Issues Rules To Curb Gaming Spend; Tencent, NetEase Plunge' - Reuters News
Portfolio Pulse from Benzinga Newsdesk
China's regulators have issued new rules to curb spending in online games, impacting major gaming companies Tencent Holdings and NetEase. The rules set spending limits, ban daily login rewards, first-time spending rewards, and consecutive spending rewards. Tencent's shares dropped by 16%, while NetEase's plunged by 25%. The regulations also require game approvals within 60 days and mandate that servers be located in China. The gaming industry, which shrank in 2021, saw a 13% revenue increase to 303 billion yuan in 2022.
December 22, 2023 | 7:20 am
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NEGATIVE IMPACT
NetEase shares plunged by as much as 25% following China's new gaming regulations, which are likely to impact the company's revenue and growth prospects.
The direct mention of NetEase's significant share price drop in response to the new regulations indicates a strong negative impact on investor sentiment and the company's potential revenue from in-game spending.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
NEGATIVE IMPACT
Tencent Holdings experienced a 16% drop in share price due to China's stringent new gaming rules, which could dampen the company's in-game revenue streams.
Tencent's share price decline is a direct consequence of the new gaming regulations, suggesting a negative short-term impact on the company's financial performance and market valuation.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90