Japanese Game Company Stocks Dip Amid Chinese Gaming Market Freeze
Bloomberg reported some pretty wild news on August 14, 2018 that is causing a (hopefully very brief) disaster in the Chinese gaming market, which is quickly growing and already one of the biggest in the world. Due to some movement within the regulatory sect of the Chinese government, a freeze has been applied to all game license approvals. As a result, many gaming companies, especially those in Japan, are experiencing slight drops in stock value.
Yuji Nakamura, who contributed to the report in question, reported several stock drops on Twitter as they happened. As of last night, companies like Capcom, Square Enix, Koei Tecmo, Konami, and even Nintendo saw drops in the neighborhood of 2-5%. Nexon, which has one of the biggest presences in China, dropped 6%. Companies like EA and Activision Blizzard have been affected as well.
These companies aren’t crashing. The freeze in China will eventually be lifted once the regulatory bodies figure out their situation, although growing concerns with things like gambling and violence are making that difficult. The biggest takeaway here is it’s important to recognize how big China’s place in the market is, but also how unstable it can be.
[Source: Bloomberg, Yuji Nakamura via Twitter]