SHANGHAI, Sept. 9 (Reuters) – Chinese games-related and “metaverse” stocks slipped on Thursday, driven by ongoing regulatory squeeze that has engulfed sectors ranging from online platforms and entertainment to for-profit tutoring and real estate.
In the latest blow to China’s online gaming industry, the South China Morning Post reported Thursday afternoon that Beijing has temporarily suspended approvals of new games, again hitting stocks like Tencent Holdings (0700.HK) and NetEase. (9999.HK). Read more
Shares of both companies fell more than 8% and 13% respectively.
The decision to freeze new video game approvals was revealed at a meeting Wednesday between Chinese authorities and game companies, including Tencent Holdings and NetEase, the report said, citing anonymous sources, adding that it did not. was not clear how long the suspension would last.
Tencent declined to comment on the game approvals while the National Press and Publication Administration, which is responsible for the green light for the game tiles, and NetEase did not immediately respond to a request for comment.
Shares of publicly traded game companies had already been beaten earlier today after state news agency Xinhua reported the same meeting.
Xinhua said the meeting was aimed at ensuring companies enforce tough new rules to tackle game addiction among minors, including a ban last month for those under the age of 18 from playing video games over three years old. hours per week, but did not mention the suspension of game approvals in the report. Read more
Xinhua also said that companies have been asked to “decisively reduce incorrect trends such as focusing” only on money “and” only on traffic “, and to change the rules and gameplay designs that encourage players to engage “.
Tencent and NetEase said earlier today that they will comply with requests from regulators.
âWe suggest caution among big tech internet platforms and online gaming companies,â said Qi Wang, CEO of MegaTrust Investment (HK).
âRegulatory pressure will likely last for years, not months. Of course, investors should take a longer-term view, but it is still too early to say which companies are best placed to face regulatory scrutiny in this regard. Classes.”
Global and domestic investors have been rocked by continued regulatory pressure that has sought to eliminate some of the perceived excesses of soaring growth in some sectors of China’s new economy in recent years.
Separately, on Thursday, Chinese state media warned investors against indiscriminate buying of Chinese stocks in the hope of profiting from the Metaverse, a shared virtual space based on virtual technologies. Read more
The official Securities Times comment follows a recent surge in stocks such as Shenzhen Zhongqingbao Interaction Network (300052.SZ) and Perfect World (002624.SZ) which are seen as expanding the metaverse. Read more
Shares of related stocks fell after the comment was published, with Wondershare Technology (300624.SZ) down almost 11% and Goertek (002241.SZ) down almost 9%.
Other regulatory measures have included cracking down on anti-competitive behavior among online âplatformâ companies and seeking better control over the vast data pools generated by the industry.
The transport ministry also said on Wednesday it would step up crackdown on illegal behavior in the ride-hailing industry and deal with online platforms that still use non-compliant vehicles and drivers.
Reporting by Brenda Goh and Alun John; Editing by Ana Nicolaci da Costa
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