China online video restrictions wipe US$20 bln off Tencent’s market value

HONG KONG/BEIJING: Plans to limit the number of new online video games in China wiped a further US$20 billion off Tencent Holdings’ market value yesterday, ratcheting up concerns over regulatory risks facing firms in the world’s No.1 market for mobile games.

China’s Ministry of Education said late on Thursday the publishing regulator should also take measures to limit the amount of time young people spend playing games and explore an ageappropriate system for players.

The restrictions are the latest challenge to hit Tencent, China’s largest game operator, which earlier this month blamed a freeze on new game approvals for the technology giant’s first quarterly profit fall in nearly 13 years.

The disappointing results came a day after investors wiped around US$15 billion off its market value on news that Chinese regulators had blocked it from charging for of one of its blockbuster titles, ‘Monster Hunter: World’.

Shares of Tencent, which has a market value of around HK$3.25 trillion, plunged as much as 5.3 per cent, leading a slide in Chinese video game companies. The benchmark Hang Seng Index fell one per cent.

Tencent has lost a staggering US$164 billion in market value from its peak in January, chiefly on regulatory uncertainty, and now trails arch rival Alibaba Group to be Asia’s second biggest listed company by market capitalisation.

Beijing’s latest regulatory directive was included in a document published on the website of the education ministry outlining how China would respond to worsening rates of myopia, or near-sightedness, among young people.