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$107.47 -4.3  -3.9%

Last Trade - 02/12/21

Sector
Technology
Size
Large Cap
Market Cap £57.39bn
Enterprise Value £50.41bn
Revenue £9.82bn
Position in Universe 174th / 7294

Europe's video gaming stocks drop after new China suspension scare

Thu 9th September, 2021 11:18am
By Danilo Masoni
    MILAN, Sept 9 (Reuters) - Europe's video game stocks fell on
Thursday and U.S. peers looked set to follow after a reported
suspension of approvals for new online games in China, the
world's No.1 gaming market.
    People with knowledge of the matter told the South China
Morning Post that Beijing had temporarily suspended approval for
all new online video games in a bid to curb the gaming addiction
among young people.  urn:newsml:reuters.com:*:nL1N2QB0GP
    "It's not good news, period. The last gaming approval
'temporary' suspension lasted nine months. It impacted the whole
sector in terms of growth and valuation compression of stocks,"
said Neil Campling, London-based head of technology, media and
telecoms research at Mirabaud.
    Shares in France's Ubisoft  UBIP.PA  fell 2% while Prosus
 PRX.AS , which holds nearly 29% of Chinese tech and gaming
giant Tencent  0700.HK , fell more than 6% in Amsterdam. Ebracer
 EMBRACb.ST  fell 4% and Rovio  ROVIO.HE  was down more than 2%.
    Shares in U.S.-listed Roblox  RBLX.N , Activision  ATVI.O ,
Electronic Art  EA.O , and Take-Two Interactive Software
 TTWO.O  dropped between 0.3% and 1.8% in premarket trade.
    Beijing last month moved to ban under-18s from playing video
games for more than three hours a week, and on Wednesday
government officials summoned gaming firms including Tencent and
NetEase  9999.HK  to ensure they implemented the new rules.
    The fresh push by Chinese regulators whacked the share
prices of Tencent and NetEase, which fell more than 8% and 13%
respectively on Thursday, dragging the Hong Kong tech index to
its biggest fall since the end of July.  urn:newsml:reuters.com:*:nL1N2QB0HF
    While most of the U.S. and European companies don't break
out their exposure to China, investors are concerned about the
business outlook in a country crucial to their growth plans.
    "Electronic Art had talked about the opportunity for Apex
Mobile in China next year, Roblox has talked about China as a
major growth engine going forward, and Ubisoft has been working
with Tencent to get approval for The Division 2," said
Mirabaud's Campling.
    "The story is more about future approvals, opportunities and
growth and this is where the risk is higher."

 (Reporting by Danilo Masoni; Editing by Tommy Wilkes and Pravin
Char)
 ((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging:
danilo.masoni.thomsonreuters.com@reuters.net; On Twitter https://twitter.com/damasoni))
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