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00:00:01
>> New moves by China to crack down on video games hit industry stocks hard on Friday. China is the world's biggest market for games and tech giant Tencent, one of the world's biggest game companies alone lost $20 billion in value. Beijing officials said that they want to limit the number of new game releases because they're worried about bad eyesight among young gamers.
00:00:22
It's the latest change in the rules this year challenging Tencent. For months Beijing's frozen new game releases. And the company recently posted its first falling profit in more than a decade. Investors responded, Tencent lost a staggering $164 billion in value since January. That's bigger than the current market value of Netflix.
00:00:44
So while China's a cash cow for gaming, Reuters Breaking Views' Robin Max says, Beijing's shifting rules can be a real risk.>> So this latest crackdown is adding to worries that these regulatory setbacks are actually a part of a wider campaign from Beijing to crackdown on the overall gaming sector in China.
00:01:01
The regulatory risks are real, but it's almost impossible to try to predict and gauge how serious they are going forward. So for the wider video games industry, China is still the largest market, especially for companies like Activision Blizzard and Nintendo. So a clampdown in terms of how many games are allowed to be released will hurt those companies too.
00:01:22
>> Tencent rose to fortune on mobile hits like Honor of Kings and publishing foreign blockbusters. But this year, the new game freeze meant it missed out on big money makers, like Fortnite, one of the summer's hottest games.>> This shows just how dependent Tencent is on gaming. So the company has spent billions of dollars trying to build up its new businesses in Cloud computing, video streaming, mobile payments, etc.
00:01:44
But it's still quite dependent on its core gaming business for its bottom line.>> Tencent also runs WeChat, China's preferred social network with a billion users. But video games are nearly a third of its revenue.