China has conducted a broad crackdown on a wide range of sectors including tech, education and property to strengthen government control
European and US gaming companies suffered huge losses due to a recent decision of the Chinese Government that barred under-18 children from playing video games for more than three hours a week.
Activision Blizzard, which has the largest exposure to Chinese markets among its US peers, reported 3.8 per cent down, while Electronic Arts, the company behind Sims, was down 2.8 per cent.
Take-Two Interactive Software gave an annual forecast late on Monday that disappointed investors. It was down 7.6 per cent.
Shares of Amsterdam-listed Prosus, which holds a 29 per cent stake in Tencent, fell 6.9 per cent, while European online video gaming stocks Ubisoft, and Embracer Group fell about 5 per cent and 3.7 per cent respectively.
China has clamped a ban on under-18s from playing video games for more than three hours a week. It is felt that this is needed to curb a growing addiction to what it once described as “spiritual opium”.
The decision was revealed at a meeting between Chinese authorities and industry giants Tencent Holdings Ltd and NetEase Inc, a report said that it was not clear until when the suspension would last.
It is felt that this is needed to curb a growing addiction to what it once described as “spiritual opium”
China has conducted a broad crackdown on a wide range of sectors including tech, education and property to strengthen government control. This has re-ignited investor fears about state intervention after Beijing had already targeted the property, education and technology sectors to curb cost pressures and reassert the primacy of socialism after years of runaway market growth.
“They don’t believe anything is off limit and will react, sometimes overreact, to anything on state media that fits the tech crackdown narrative,” said Ether Yin, partner at Trivium, a Beijing-based consultancy.
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