Tencent Market Value Plunges Following Chinese Regulatory Shift

Tencent Market Value Plunges Following Chinese Regulation Changes

Chinese publishing behemoth Tencent has taken a serious hit to its valuation following sweeping new regulatory laws for electronics in China. The gaming giant who is behind publishing PUBG and Fortnite within China, as well as offering a serious alternative to Valve’s ubiquitous Steam digital storefront, has lost approximately $20 billion dollars in market value.

Tencent Market Value Plunges Following Chinese Regulation Changes

The laws enacted by the Chinese Ministry of Education foresee changes to how many online-based games any given publisher is authorized to release in what is by far the largest gaming market on the planet. Citing the rise of online gaming in the country and the resulting increase in cases of myopia, the government was eager for regulatory bodies to curb playing time and instil age-restriction solutions to contain how and when younger players have access to games.

Reuters reports that over 450 million Chinese manifest varying degrees of myopia, prompting authorities to find a culprit. China hasn’t just targeted video games, but mobile phones as well, believing the nearsightedness epidemic finds its roots in prolonged periods spent eyeing screens.

Tencent Market Value Plunges Following Chinese Regulation Changes

This isn’t the first time Beijing has acted re-actively when it comes to regulatory issues. Back in early August, Monster Hunter World was banned from being sold within the Chinese territory following wide reaching complaints. Similarly, after being demonized in the national press, Tencent opted to set a limit on the amount of time younger players could use RPG Honour of Kings.

Tencent’s plunge in market value may seem colossal, but put into perspective with Tencent’s overall value of over $500 billion and year-to-date losses amounting to over $160 billion, the situation is not as dire as it first appears to be.

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