Shares of several Chinese tech giants tanked in Hong Kong on Friday, wiping billions off their collective value, after Beijing unveiled a new set of regulations to restrict online spending in the gaming industry as part of its wider crackdown.
Tencent, one of the biggest gaming companies in the world, plummeted 12.4% on Friday in Hong Kong. It was the stock’s worst day since October 2008, during the depths of the global financial crisis.
The drop wiped 367 billion Hong Kong dollars ($47 billion) off Tencent’s market value, according to CNN calculation based on the stock market statistics.
NetEase, another gaming giant, dived 25% in Hong Kong afternoon trade, marking its biggest daily loss since it first listed there in June 2020.
That plunge wiped 128 billion Hong Kong dollars ($16.4 billion) in value.
Bilibili, one of China’s biggest video-sharing platforms, plunged 9.7%. Kuaishou, operator of China’s second-largest short-video app, fell 7.2%. Both companies have businesses in online gaming.
Online games will be required to set spending limits, while in-game measures that could induce high spending — such as daily login rewards — will be banned, according to the draft rules issued by the National Press and Publication Administration on Friday.
The proposed draft also stipulated that in-game measures that could lead to trading of virtual goods at a high price — such as auctions — will be prohibited, adding that large tips to players who livestream their games will also be banned.
Games should only offer real name registration to players, and game publishers should store data locally, according to the draft rule.
In-game purchases have become ubiquitous and highly lucrative within the gaming sector, particularly for mobile games which are often released to consumers for free.
The move comes as China intensifies its crackdown on its massive online gaming industry, as Beijing seeks to reverse what it sees as a growing trend of gaming addiction among young people.
In August 2021, China barred online gamers under the age of 18 from playing on weekdays and limited their play to just three hours most weekends.
That was part of Beijing’s sweeping clampdown targeting what it sees as overly powerful companies, especially in Big Tech. The regulatory onslaught, which started in late 2020, has shed more than $1 trillion in market value from the Chinese companies worldwide and sent chills through the wider economy.
But as China’s economic outlook deteriorates, Beijing has shown signs of easing the crackdown, frequently talking up tech companies’ role in the economy.
Before Friday’s sell off, Tencent had rebounded 64% from its historic low on October 28, 2022.
