There’s more bad news for the gaming industry that expands well beyond the borders it was intended for and has resulted in Tencent’s market value dropping by $20 billion.
Regulators in China have recently been putting a lot of strain on the gaming industry and they just hit the industry with a massive blow. China is cracking down on online games specifically in an attempt to combat screen-related myopia, that’s nearsightedness. There isn’t any scientific proof that online gaming has and an impact on myopia, however. In addition to this move to limit games, they’re also going restrict the amount of time young people spend playing games and they’re exploring an age-appropriate restriction system as well.
As you would expect this news didn’t go over well in the stock markets. This is where Tencent, a company that has been spreading its wealth far and wide to international game companies. These deals with them have also allowed Tencent to publish many of the games in China. But, since China will be restricting games…it looks like those deals aren’t going so well for Tencent anymore. The $20 billion loss is actually only a drop of 5%. In all though, Tencent has lost more than $160 billion in market value since January because of all of the recent regulation changes in China.
While the BBC speculates that Tencent will continue to invest in markets outside of China it is equally possible that they won’t given the fact that they won’t be able to release the games they invest in for Chinese audiences. This lack of investment could very well have a snowball effect that has a massive impact on the gaming industry as a whole. We may see Tencent and other Chinese gaming companies shifting gears to focus more on single player, offline games.
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