Shares of several prominent gaming companies, including Tencent, NetEase, and Bilibili, tanked on Friday following the introduction of new regulations by China aimed at restricting online spending in the gaming industry.
According to the draft rules issued by China's National Press and Publication Administration, spending limits will be set in online games, while in-game rewards like daily login rewards will be prohibited.
The regulations also recommend allowing only real-name registrations, requiring game publishers to store data locally, and banning certain in-game measures, such as auctions and tips to live-streaming game players.
Chinese government expect these new regulations to address the growing issue of gaming addiction among young people. In August 2021, authorities had already implemented measures such as banning online gamers under the age of 18 from playing on weekdays and limiting their weekend playtime to nearly three hours.
Currently, Tencent's stock is tanking 9.86%, to $36.47 on the Other OTC, while NetEase's stock is plummeting 15.66% to $88.05 on the Nasdaq.
One of China's largest video-sharing platforms, Bilibili's stock is falling 4.97%, to $10.99 on the Nasdaq.
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