The gaming industry in China is reeling from a significant market plunge, with the market value of Tencent and NetEase evaporating by nearly HK$500 billion. The sharp decline in gaming stocks was led by NetEase, which fell by more than 24%, and Tencent Holdings, which fell by more than 12%.
Industry insiders have attributed the decline to the impact of recharge limits imposed by the government, which directly affects the turnover of game manufacturers. According to a gaming industry worker known by the pseudonym Luo Qi, rumors of the recharge limits had been circulating for three to four months prior to the sharp decline in stock values. “We didn’t have any big surprises this time,” Luo Qi said. “But the market did react quite strongly.”
Luo Qi expressed the need for detailed rules to be issued as soon as possible, as the substantial impact of the recharge limits on the industry revenue can only be measured once relevant standards are clarified. In his opinion, the provision of setting a recharge limit for each game may have the greatest impact on industry revenue and scale.
The gaming industry is now awaiting further clarifications and detailed rules in order to assess the full impact of the government’s measures. The sharp decline in market value has shaken the industry, with emotional factors accounting for a large proportion of the reaction. Industry insiders hope that detailed rules will be issued soon in order to provide clarity and minimize the uncertainty currently affecting the gaming sector.
The situation remains uncertain, and the gaming industry is eager for further information and clarification in order to assess the full impact of the government’s measures. As the industry continues to navigate challenges, the need for clarity and transparency has become more urgent than ever.