
Chinese video gaming stocks remain weak following their plunge last Friday after China’s gaming regulator published draft rules designed to restrict practices that encourage video game players to spend more money and time online. The markets had hoped that the Chinese government was finished cracking down on China’s big tech companies. Instead, last Friday’s action suggested that the Chinese government still has a strong appetite for trying to control tech.
Last Friday’s sweeping restrictions announced by China’s gaming regulator caught investors off guard and harkened memories of the tech crackdown in 2021 when various government agencies imposed curbs on sectors from e-commerce to entertainment while decimating the online education industry by declaring profits illegal. The restrictions sparked a rout in Chinese gaming stocks, with Tencent Holdings, NetEase, and Bilibili losing $80 billion in market value.