$46 billion wiped off Tencent’s market capitalization

Hong Kong: China has released a new draft regulation to curb video gaming, causing a sharp decline in shares of China’s biggest gaming companies.

As Beijing released draft rules aimed at curbing players’ spending, $46 billion was wiped off the market capitalization of Tencent Holdings, Nikkei Asia reported.

According to the draft rules, “All online games will be required to set limits on users recharging their accounts, and pop-up alerts will be used to warn and remind users about ‘irrational spending’ Needed

The draft regulation has been issued by China’s gaming regulator, the National Press and Publication Administration.

“To strengthen industry standard management and promote high-quality and sustainable development, we have drafted ‘Online Game Management Measures’ and are now seeking feedback from the public,” the regulator said in a statement.

The draft rules would require developers to limit the amount of money players can spend in-game.

The rules would also ban daily sign-in rewards as well as incentives such as large tips to game streamers.

Beijing moved against the gaming sector for the first time in 2021, ruling that online gamers under the age of 18 would only be allowed to play for an hour on Fridays, weekends and holidays.

China is the world’s largest gaming market, and Tencent is the global leader in the region in terms of revenue.

Viggo Zhang, vice president of Tencent Games, said the company will strictly enforce any new regulatory requirements.

Shares of NetEase, another Chinese gaming company, dropped more than 24 percent following the new development.

Shares in Dutch tech investor Prosus fell more than 14 percent, the BBC reported.