The new regulations, announced by the National Press and Publication Administration, forbid minors from playing video games between Monday and Thursday. On the other three days of the week, they have permission to play only between 8 p.m. and 9 p.m., including public holidays.
NetEase stock dropped 5.4%, near 87.80, during morning action on the stock market today. Bilibili fell 3.1%, near 73. Both companies earned about 45% of revenue from mobile games last year. Tencent, which gets about one third of its revenue from games, fell 2.6%, near 57.40. Sohu dropped 3.4%, near 22.10.
The new measures announced Monday aim to curb what authorities describe as video game addiction they blame for societal ills. This includes distracting young people from school and family responsibilities. China stocks fell earlier this month when China’s official news agency criticized online gaming as addictive to minors, calling it “spiritual opium,” according to news reports.
Tencent followed up by saying it would curb playing time for younger gamers and said it planned to bar in-game purchases for gamers under 12.
China Stocks Under Heavy Pressure
China stocks are under heavy pressure, with valuations cut roughly in half this year due to an ongoing government crackdown focused on antitrust issues. This includes Alibaba (BABA) and JD.com (JD), the two largest e-commerce companies in that country.
In mid-August, for example, antitrust regulators issued new rules aimed at banning unfair competition. The new rules affect various areas, including false advertising, the handling of consumer data, and reviews. In addition, operators should not use data and algorithms to collect and analyze competitors’ trading information.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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