China's game approval freeze forces Tencent to restructure
The regulatory shake-up has had a tremendous impact on Tencent.
Tencent hasn't been having a great time ever since China established a new regulator that brought game approvals to a standstill. Back in August, it had to pull Monster Hunter: World from the Chinese market after regulators cancelled its license. Now, the internet giant has announced that it's restructuring the company for the first time in six years due to challenges caused by tighter government regulations. In addition to bringing MH:World to China, Tencent owns the companies behind League of Legends and Clash of Clans, which are immensely popular games in Asia. It also owns the social media and chat platform WeChat.
According to Reuters, the company's market value has plummeted in the past months, as investors worry about the regulatory roadblocks it's facing and its lack of clear overseas strategy. Back in August, Bloomberg reported that it lost over $160 billion in value since January this year, and considering its shares fell further just last week, that number most likely grew over the past couple of months.
Going forward, Tencent will implement changes focusing on its corporate offerings. It will consolidate three business groups into a single unit and will create a new one for the cloud and smart industries in order to improve its cloud-based services for corporate clients. It will also "further explore the integration of social, content and technology that is more suitable for future trends, and promote the upgrade from consumer internet to industrial internet." In addition, it's investing more money into research and development to make sure the company survives this ordeal.
