NetEase’s shares fall after nationalist backlash in China over Winnie the Pooh post

Shares of NetEase fell Monday morning after the Chinese gaming company fell afoul of a social media post suspected of alluding to Winnie the Pooh, a popular way of mocking President Xi Jinping.

The company said over the weekend that it would delay the release of the blockbuster game in Asia Diablo immortalsent its Hong Kong-listed shares up 9 percent to HK$137 (US$17.45) in the morning before trimming losses slightly by midday.

Diablo immortalan online multiplayer action game developed by NetEase and Activision Blizzard, were scheduled to launch in China on June 23. But on Sunday Diablo immortal said the release date would be pushed back to “optimize the gaming experience.”

The delay came after a screenshot circulated online of a post published by the game’s official account on Weibo, the popular Chinese microblogging site, on May 22, which read, “Why didn’t the bear resign?”

The remark was interpreted as a reference to China’s President Xi Jinping, who is often portrayed as Disney’s Winnie the Pooh. The cartoon bear has been on the censorship blacklist in China for years.

Diablo immortal was banned from making new posts on Weibo, and discussions related to the bear comment were deleted from the platform by the country’s overly vigilant censors.

Nationalists also criticized the company’s press release on Saturday, in which the game’s creators announced the postponement of the game’s release date in the Asia-Pacific region to “Taiwan time July 8.”

China has agreed frustrate any attempt by Taiwan strive for independence. “Between the game and my country, I choose the latter,” wrote one Weibo user.

NetEase declined to comment.

The gaming industry has been hit particularly hard by China’s broad crackdown on tech companies. Authorities suspended the approval of new games in July last year over concerns the country’s children were becoming addicted to games that undermine Communist Party values.

A month later, Chinese children were banned from playing video games more than three hours a week under new rules that further hurt the stock prices of companies like NetEase and Tencent and slowed their revenue growth. In August, state-run media described gaming as a form of “spiritual opium.”

But in April, the industry won a reprieve afterwards Chinese regulators approved new online games for the first time in nine months.

Charlie Chai, who covers NetEase for 86 Research, said the sector is still under significant pressure.

“In the last two years, the market has seen two mega games – Diablo immortal and dungeon fighter — faced delays, which reflects badly on the survival of the gaming industry. It doesn’t seem to be getting much support from the government,” Chai said.

Two weeks after its international release on June 2nd in countries outside of Asia, the mobile version of Diablo immortal had amassed more than 8.5 million downloads and generated $24.3 million for the developers, according to data compiled by AppMagic.

Microsoft, the software giant that also owns Xbox, earlier this year announced an agreement to acquire Activision Blizzard in a $68.7 billion deal, the largest acquisition in gaming industry history.

NetEase’s shares fall after nationalist backlash in China over Winnie the Pooh post Source link NetEase’s shares fall after nationalist backlash in China over Winnie the Pooh post

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