Florence Lo/Portal
In this illustration image, a Tencent Games app logo is seen on a mobile phone. Portal/Florence Lo/Illustration
Hong Kong CNN –
Shares of several Chinese tech giants slumped in Hong Kong on Friday, shedding billions from their total value, after Beijing unveiled a series of new regulations to curb online spending in the gaming industry as part of its broader crackdown.
Tencent, one of the world's largest gaming companies, plunged 12.4% in Hong Kong on Friday. It was the stock's worst day since October 2008, when the global financial crisis was at its peak.
The decline wiped 367 billion Hong Kong dollars ($47 billion) off Tencent's market value, according to CNN calculations based on stock market statistics.
NetEase, another gaming giant, plunged 25% in afternoon trading in Hong Kong, posting its biggest daily loss since it first listed there in June 2020.
This collapse wiped out 128 billion Hong Kong dollars (US$16.4 billion) in value.
Bilibili, one of China's largest video-sharing platforms, fell 9.7%. Kuaishou, operator of China's second-largest short video app, fell 7.2%. Both companies are active in the online gaming sector.
NetEase, another gaming giant, fell 20% in afternoon trading in Hong Kong.
Online games must set spending limits, while in-game measures that could lead to high spending – such as daily login rewards – will be banned, according to the draft rules issued Friday by the National Press and Publication Administration.
The proposed draft also proposed banning in-game activities that could lead to the trading of virtual goods at high prices – such as auctions – and added that large tips for players who livestream their games also be banned.
According to the draft rules, games should only allow players with real names and game publishers should store data locally.
In-game purchases have become ubiquitous and extremely lucrative in the gaming sector, particularly in mobile games, which are often made available to consumers for free.
The move comes as China steps up its crackdown on its huge online gaming industry as Beijing seeks to reverse what it says is a growing trend of gambling addiction among young people.
In August 2021, China banned online gamers under 18 from gaming on weekdays and limited gaming to just three hours on most weekends.
That was part of Beijing's broader crackdown on what it sees as overly powerful companies, particularly in Big Tech. The regulatory onslaught that began in late 2020 has drained more than $1 trillion in market value from Chinese companies worldwide and jolted the entire economy.
But as China's economic outlook worsens, Beijing has shown signs of easing its crackdown, often highlighting the role of tech companies in the economy.
Before Friday's selloff, Tencent had recovered 64% from its historic low on October 28, 2022.