China's gaming giants Tencent Holdings (OTC: TCEHY; HKEX: 0700) and NetEase Inc. (Nasdaq: NTES; HKEX: 9999) turned to gains on Tuesday after reports surfaced that gamers have found ways to circumvent the new limitations that went into effect on Sep. 1.
The new gaming restrictions limit underage players in China to three hours of playtime a week – and only on weekends. In addition, companies are now requiring registration under real names to play, as gaming companies are responsible for ensuring compliance. Earlier, the nation allowed 1.5 hours per weekday for minors.
The toughening of the laws was met with an outcry from the public, as China is the world's leader in esports; the restrictions practically kill the teens' chances from entering the big games, as Reuters wrote, citing Chen Jiang, an associate professor at Peking University's School of Electronics Engineering and Computer Science. The esports business is also expected to suffer.
However, the People's Daily wrote Tuesday that certain sites are offering rent and swap services for player accounts. Tencent is now suing over 20 account trading platforms for renting and selling accounts for its flagship game "Honor of Kings," the only one game to ever reach 100 million daily players. According to the medium, users could rent an account for 33 yuan ($5) for two hours of play.
Further, video game website Kotaku notes there are other ways for minors to circumvent the new limitations. For instance, parents may give their children access to their adult gaming accounts. Notably, the new restrictions are not law, but the country's independent tech giants have suffered enough this year from the authorities' crackdown and paid enough fines to be eager to comply with the new warnings.
The stock in Tencent ended 6% higher Tuesday, at $67.09 per share. NetEase closed 3% higher, at $95.73 a share. Both conglomerates have taken on an uptrend over the past month following wide sell-offs on fears spurred by Beijing's anti-monopoly probes, as well as stricter rules on gaming and protection of user data.