Minus $80 billion in a day: a Chinese government bill caused the market value of Tencent and NetEase to plummet

The Chinese government continues to tighten regulations on its gaming companies and gamers.

Here's What We Know

China's National Press and Publication Administration has published a bill that is designed to significantly curb Chinese people's addiction to online gaming.

Companies want to ban rewarding gamers for logging into games every day, giving them bonus in-game items and limiting the amount of money that sits in an in-game account.

Such requirements would hit the profitability of online gaming hard and the Chinese market immediately reacted to the project. The two largest gaming corporations, Tencent and NetEase, lost 80 billion dollars in market value in one day alone! The share price of Tencent fell by 16%, and NetEase - by 25%.

It's worth noting that this law will still be considered, but the Chinese government has been actively fighting gaming addiction for several years and it's very likely that Chinese gaming companies will have to fundamentally rethink their strategies and monetisation methods.

Source: VGC