Tencent Holdings Ltd. and Netease Inc. shed more than $60 billion of value as investor fears grow that Chinese regulators are preparing to tighten their grip dramatically on the world's largest gaming industry.
Chinese regulators summoned industry executives to a Wednesday meeting to instruct them to break their "solitary focus" on profit and prevent minors from becoming addicted to games, according to the official Xinhua News Agency. Regulators also said there will be a temporary freeze on approvals for all new online games, the South China Morning Post reported Thursday, a move that will chill the pipeline of titles that developers depend on to drive growth.
On Thursday, Tencent extended losses in late afternoon trading to finish 8.5% lower, its steepest fall since July. Netease plummeted 11%. Representatives for the companies didn't immediately respond to requests for comment. Prosus NV, Tencent's biggest shareholder, fell 6.6% in Amsterdam while parent Naspers Ltd. dropped as much as 8.3% in Johannesburg.