Tencent, NetEase shares dive after Chinese regulators summon the firms regarding the gaming concerns

September 14 2021: – shares of Tencent and Netease decreased in the morning after Chinese regulators called them and other gaming companies for an interview, which reminded them of restrictions on game time for children.

The propaganda department of China, cyberspace regulator and other authorities said they would “seriously deal with” any violations of their rules.

Tencent shares were down over 5% in morning trade in Hong Kong, while NetEase fell more than 6%.

The Chinese government is being concerned about the impact of gaming on children’s physical and mental health. The regulators reminded gaming companies they need to limit game time for children under 18 years. Under rules announced last month, kids cannot play online games for more than 3 hours per week and only during specific times and days.

The regulators said that gaming companies should also control their content, including banning “illegal” content such as pornography.

Authorities also said that unfair competition and monopolies should be avoided. Last month, China’s market regulator said that internet companies across the board should avoid unfair competition and issued draft rules that target the practices.

Companies should also change the designs of their games that the users are addicted to, they said.

In response, gaming companies said on Thursday that they seek to comply with the guidance from regulators.

“We believe in healthy gameplay and take the physical and mental health of minors very seriously. We appreciate the guidance and instruction from the relevant regulators and will work hard to be in full compliance with all rules relating to youth game addiction and content regulation,” Tencent said to CNBC.

NetEase adds that it would comply, saying that it “will strictly follow the rules and instructions over anti-addiction measures for minors in games.”

“We will continue our efforts to deliver more quality games and promote a healthy and responsible gaming environment for minor players, as we seek to build and promote a wholesome gaming environment in China,” the firm told CNBC.