China Introduces New Measures to Regulate Online Gaming Industry\n\nChina has announced new measures to control spending and content in the online gaming industry, causing a significant drop in the market value of Tencent Holdings Ltd. and other major players. The move comes as Beijing continues its crackdown on the sector, citing concerns over gaming addiction and its impact on youth.\n\nThe new rules, published by Beijing’s top gaming regulator, include a ban on rewards for frequent log-ins and forced player-duels, as well as a vague prohibition on content that may violate state secrets. These sweeping restrictions have surprised industry players and investors, signaling another crackdown on the world’s largest mobile gaming market.\n\nThe announcement has already had a major impact, with Tencent’s stock falling by 16% and smaller rival NetEase incorporated experiencing a 28% drop. Other companies, such as Nexon Co. and Bilibili incorporated, have also seen declines in their stock prices.\n\nThis is not the first time the Chinese government has taken action against the gaming industry. In 2018, they froze approvals for new titles and launched investigations into content, forcing companies like Tencent to make changes to their games. In recent months, there appeared to be a thaw in the sector, with officials encouraging esports as a way to boost the post-Covid economy.\n\nThe government has now set a cap on how much money players can spend within a game, and companies will need to overhaul their monetization models. This will have a significant impact on the majority of games in China, except for those that sell copies.\n\nThe crackdown on gaming is part of a larger campaign by the Communist Party to rein in the power and expansion of the private sector. This has already affected major tech companies like Ant Group Co. and Alibaba Group Holding Ltd. The gaming industry has also been a target, with the first suspensions of game approvals occurring in 2018.\n\nIn a China’s new measures to regulate the online gaming industry have caused a significant drop in stock prices and will have a major impact on the market.