Tencent and NetEase shares fall over 3% after China tightens gaming rules for kids
fell on Tuesday after regulators dramatically cut down the amount of time children were allowed to play games.Tencent shares were down around 3.2% in morning trade while NetEase's Hong Kong-listed stock fell 3.5%.
On Monday, China's National Press and Publication Administration said children below 18 years old will only be allowed to play online gamesThe ruling significantly reduced game time for minors who, under 2019 rules, were allowed to play for up to 90 minutes a day for most parts of the day. Gaming is the largest source of revenue for NetEase and Tencent. But analysts don't expect a huge impact on the companies as a result of the new rules.
Tencent has previously said only a small amount of gaming revenue comes from younger players in China. "We estimate about 5% of gaming revenue comes from minors under 18 years old, and we believe there is about 3% earnings impact to Tencent if we assume gaming contributes about 60% of total earnings," investment bank Jefferies said in a note published on Monday.
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