$46 billion wiped off Tencent's market cap after China's draft rule to curb gaming

China has released a new draft regulation to curb video gaming, leading to a massive plunge in shares of China's biggest gaming companies.

As Beijing issued draft regulations aimed at curbing players' spending, $46 billion were wiped off Tencent Holdings' market capitalisation, reports Nikkei Asia.

“All online games will be required to set limits on users recharging their accounts, and pop-up alerts should be used to warn and remind users of 'irrational spending,' according to the draft rules.

The draft regulation has been issued by the National Press and Publication Administration, China's gaming regulator.

“In order to strengthen industry standard management and promote high-quality and sustainable development, we have drafted the 'Online Game Management Measures' and are now soliciting opinions from the public,” the regulator said in a statement.

The draft rules would require developers to limit the amount of money players can spend in-game. The rules would also ban incentives such as daily sign-in rewards as well as large tips to game streamers.

Beijing first moved against the gaming sector in 2021, ruling that online gamers under the age of 18 would only be allowed to play for an hour on Fridays, weekends and holidays.

China is the world's largest gaming market, and Tencent is the global leader in the sector in terms of revenue.

Tencent Game's vice president Vigo Zhang said the company would strictly implement any new regulatory requirements.

Shares in another Chinese gaming company NetEase went down more than 24 per cent after the new development.

Shares of Dutch tech investor Prosus lost more than 14 per cent, reports the BBC