The Chinese giant Tencent saw their shares lose 3% of value after Chinese regulators blocked the sale one of their games, ahead of their financial results. Since the beginning of the year, Tencent has lost 30% of its value.
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Recently, the game “Monster Hunter: World” got removed from sale in China, due to regulators withdrawing its license, after receiving a large amount of complaints. It is still unclear what people were complaining about and exactly why the game got removed from sale, but this affected its distributor in China, Tencent. Tencent had obtained the license for distributing the game in China, with a million copies of the game pre-ordered through their service “WeGame” but had to stop selling the game after losing the license from regulators.
Meanwhile, the Chinese release of PUBG is still pending approval from regulators to monetize it, meaning Tencent is not making any money on it either.
Tuesday 14th, the shares lost 3% of their value, with the company losing close to 30% of its value since the beginning of the year, when their shares were worth 474.60 HKD. Tuesday, they were worth 348.60 HKD and declined down to 320.00 HKD on Thursday 16th. This is around 178 billion dollars in market capitalization lost since the beginning of the year, going from 573 billion dollars to 395 billion dollars.
Wednesday 15th, the company reported its results for the second quarter, with the first decrease in net income since 2005, down by 2%. Revenue still grew by 30%, although at a slower rate then in the past 3 years. The main reason behind this slowdown in growth is, as mentioned, issues in monetizing its most popular mobile game, PUBG, and still needs to receive the government license to launch Fortnite on the Chinese market.