On Thursday, Tencent shares slumped as regulators ramped up new restrictions on video gaming.
Tencent is a world-leading internet and technology company and accounts for about 40% of the gaming market in China.
The tech company has a current market capitalization of $4.28 trillion.
Moreover, Tencent Holdings Ltd has a revenue of $640.98 billion and shares outstanding of $9.60 billion.
On Wednesday, Chinese regulators summoned gaming firms to discuss new restrictions on the video game platform.
Consequently, the government emphasized that the gaming companies must not be focused solely on profits.
Recently, China imposed tighter guidelines that will limit the exposure time of players under 18 years of age.
Under the rules, children will be allowed to play not more than three hours per week at a specified time and day.
Accordingly, the authorities demanded Tencent and Netease to tighten the examination of their game content.
In addition, the regulators called on the gaming platforms to remove obscene and violent scenes.
In response, Tencent and Netease announced that they seek to comply with the anti-addiction directives from the regulators.
Additionally, the companies will ensure healthy gameplay for minors as they take the mental and physical health of the players as a priority.
Meanwhile, Beijing temporarily froze game approvals.
Consequently, the shares of the gaming companies sharply declined.
Tencent pared its previous gains as it tracked its biggest fall since July.
The gaming giant plummeted 7.91% or 41.50 points to $41.50 per share.
Similarly, Netease plunged 5.17% or 4.95 points to $90.78 per share.
Likewise, Shanghai-based gaming company Bilibili Inc. edged down 5.86% or 5.34 points to $85.80 per share.
The Asia Pacific Mixed on Thursday Trade
Meanwhile, the Asia Pacific stocks mixed as game stocks dropped in the market.
In China, the Shanghai Composite index edged up 0.49% or 17.94 points to $3,693.13 per share.
Then, the Shenzhen Component index rose 0.07% or 10.45 points to $14,698.53 per share.
Consequently, Hong Kong’s Hang Seng index plunged 2.30% or 604.93 points to $25,716.00 per share.
On the Tokyo Stock Exchange, the Nikkei 225 index declined 0.57% or 173.02 points to $30,008.19 per share.
Additionally, the broader TOPIX index plummeted 0.71% or 14.68 points to $2,064.93 per share.
Elsewhere, South Korea’s KOSPI inched down 1.53% or 48.29 points to $3,114.70 per share.
In Australia, the S&P/ASX 200 index tumbled 1.90% or 142.50 points to $7,369.50 per share.