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Tencent share price drops after China bans Monster Hunter: World sales on WeGame

This is a monstrous blow for the Chinese online game storefront.

Asif Khan

August 14, 2018 12:35 AM

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Monster Hunter: World's PC launch is going strong on Steam, but sales of the game have been banned from Chinese gaming platform WeGame. Tencent's Steam competitor in China is the go-to spot to download Fortnite in the country, but it seems that Monster Hunter: World did not meet regulatory requirements. Share of Tencent (700:HK / TCEHY) fell over three percent in Hong Kong trading on the news. WeGame has been a bright spot in the revenue growth at Tencent with the success of PUBG and Fortnite along with some other mobile game standouts. Tencent is set to report earnings on Wednesday.

A source close to WeGame told the Financial Times that "bureaucratic infighting" inside China's new media regulator led to the removal of the game. Monster Hunter: World has sold over eight million copies of the game before its PC release. WeGame had the game for sale on August 8, and the one million customers who were lucky enough to buy the game before its removal by regulators will be able to apply for a full refund if they apply before August 20. After that date, there is no guarantee that they will be able to play the game, but there is no guarantee that the game will be playable for WeGame users over time. 

While this is a bad sign of things to come for sales of games in China, Tencent is profiting off of other investments in the video game industry. The company owns 40% of Epic Games, the creators of Fortnite, and are sharing in the vast profits from the ongoing mania surrounding the battle royale game. It is never good to hear of a game being banned in such a large market, but Tencent remains very diversified. Traders and investors should pay close attention when the company reports their earnings results later in the week. Today's news is hugely disappointing for Capcom and Tencent as well as Chinese gamers who just wanted to go on adventures with their Palicos.

Asif Khan

CEO/EIC/EIEIO

Asif Khan is the CEO, EIC, and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.