China's new measures to restrict spending by gamers on video games have sent ripple effects through stock markets around the world.

Prosus NV fell about 20% in Amsterdam trading, losing 15.5 billion euros ($17.1 billion) of its market value at one point, after regulators' draft rules dealt a blow to the company's stake in the Chinese Internet giant. Giant Tencent Holdings. South African parent Naspers also fell by a fifth.

Control for video game players

In Hong Kong, Tencent, in which Prosus holds a 25% stake, closed down 12%. In New York, the Nasdaq Golden Dragon China index of U.S.-listed Chinese stocks fell 2.4%, with video game developer NetEase leading the losses.

Shares of Tencent investee Ubisoft Entertainment fell about 8.3% in Paris trading, while its US subsidiary Unity Software also fell.

China's gaming regulator on Friday released draft rules aimed at cracking down on practices that encourage players to spend more money or time on online games. Widespread restrictions on game rewards for logins and repurchases have raised fears of another industry crackdown in the world's largest mobile gaming arena.

The China Regulatory Commission will consider amending the draft rules based on comments from relevant government departments, companies and users, the state-owned China Press publication Radio Film and Television Journal reported on Saturday.

Widespread global losses

According to Bloomberg Research analyst John Davis, the decline in Prosus' share prices shows that it is sensitive to factors outside its sphere of influence. Its stake in Tencent “casts a shadow over its other investments, and that's unlikely to change anytime soon,” he said.

The performance of Process shares is closely linked to the performance of Tencent shares, which account for three-quarters of its total value in the Chinese giant. The Dutch company counts Tencent as its largest investor in a broad portfolio of technology stocks.

Process reduced its investment in Tencent a year ago to fund the buyback plan. The company said this month that its ownership had fallen by less than 25%.

In Johannesburg, the main local index FTSE/JSE Africa All Shares fell about 1.8%, with Naspers and Prosus the market's biggest decliners.

For Chinese stocks, the poor performance this year has gone from bad to worse. Friday's decline pushed the “Golden Dragon” index's losses to about 8% in 2023, far below the “Nasdaq 100” index's 54% gains.

“In a way, it's a fitting end to a year where China has been very disappointing for the bulls,” said Rajeev de Mello, global macro fund manager at GAMA Asset Management. “The performance gap between US and Chinese stocks is surprising.”