Chinese Game Stocks Fall After China Proposes Online-Game Regulations

By Jiahui Huang

Chinese gaming stocks traded in Hong Kong dropped after Beijing released draft regulations for the online game industry which included restrictions on the incentives to play or spend more online.

Shares of Netease, one of China's major online gaming companies, was 22% lower at 126.30 Hong Kong dollars (US$16.17) Friday, on track for their largest one-day loss since July 2021.

Tencent, another Chinese gaming giant, was 11% lower, on track for its largest one-day loss since October 2022. The benchmark Hang Seng Tech Index was down 3.1%.

Gaming stocks dropped after Chinese officials released draft regulation for the online gaming industry. The proposals included banning minors from tipping game players and limiting users' in-game spending.

Game companies aren't allowed to set rewards to induce behavior such as rewards for daily logins, first-time recharges or continuous recharges, according to the draft proposal released by the National Press and Publication Administration.

The proposal also prohibits minors from tipping hosts who livestream games and stops companies from offering probability-based lottery services to under-18 users.

NPPA said it is seeking public comment on the rules until Jan. 22, 2024.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

December 22, 2023 00:37 ET (05:37 GMT)

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