China shock pulls US gaming stocks down too

The shares of the gaming groups Activision Blizzard, Electronic Arts and Take-Two are clearly among the losers on the US market on Tuesday. The reason for the price losses was, among other things, a newspaper report from China – but Take-Two also contributes to the weakness.

The Chinese news agency Xinhua, which is under the influence of the Chinese Communist Party, published an article calling for regulation of the Chinese online gaming sector. Among other things, games were referred to as “intellectual opium” and “electronic drugs”.

The article that appeared in the Economic Information Daily has now been deleted – but the damage remains. Chinese gaming stocks such as Tencent, NetEase or Huya lost double digits in some cases.

China is also important for Activision Blizzard & Co

However, possibly stricter regulation of the Chinese gaming sector could also have an impact on Western game developers. In the growing mobile sector in particular, the corporations are currently trying to gain a foothold in the Chinese market. No wonder, because it will be in China around 25 percent of all smartphone game sales achieved and in the past year the market there grew by 31 percent.

For example, Activision Blizzard will lose just under four percent before the quarterly figures are released tonight. The US group sells “Call of Duty Mobile” in China together with Tencent and has developed the mobile game “Diablo Immortal” in cooperation with NetEase.

Weak prognosis from Take-Two

Take-Two’s quarterly report also contributes to the weakness of gaming stocks. While the GTA developer was able to exceed the expectations of the analysts in the first fiscal quarter (until the end of June), investors were seriously disappointed by the unchanged forecast.