Naspers, Prosus shares slide over gaming rules plans
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NASPERS and Europe-based subsidiary Prosus saw their share prices plummet yesterday following reports that China’s government was stepping up efforts once again to limit online gaming.
Naspers’ share price retreated by 7.65 percent to close at R2 433.99 on the JSE yesterday, while Prosus, which holds almost a 30 percent stake in China internet gaming giant Tencent, dropped 6.3 percent to end trading at R1 240.72 in Johannesburg.
The South China Morning Post (SGMP) reported online yesterday that China’s officials had temporarily “slowed down” all approvals of new online games for an unspecified amount of time, in what was seen as the latest crackdown by the Beijing government on what it viewed was an epidemic of video game addiction.
The SGMP cited sources who said the slowdown in approvals was announced at a meeting between government officials and gamemakers this week.
Chinese regulators had apparently 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, Tech Central reported online, citing China’s official Xinhua News Agency.
This followed another crackdown just over a week ago, when officials cut gaming playing time down to a 3-hour per week limit for under-age gamers, among other measures.
This had represented the China government’s strictest crackdown yet over entertainment for youths, and had represented a blow to the world’s largest mobile gaming arena.
The new rules follow other broad and tightening measures by Beijing on China’s tech giants, such as Alibaba Group and Tencent Holdings, such as for instance the barring of online education for profit in China, and investors have in recent months become unnerved, forcing Chinese shares lower.
In 2018 there was a 10-month freeze on game monetisation licences, also intended then to combat addiction and myopia among children, which had caused Tencent’s first profit drop in at least a decade and helped wipe about $200 billion off its market capitalisation at one point.
Analysts, according to previous media reports, have become concerned that while the tightening of controls over gaming was initially viewed by many as a paternalistic gesture by the Chinese government, it has instead begun to resemble the beginnings of a broader, and wider tightening of controls over China’s burgeoning tech sector.