<p>Shares of Tencent Holdings Ltd dropped nearly 3% on Tuesday, after China announced new rules forbidding under-18s from playing video games for more than three hours a week.</p>.<p>Beijing said the move was necessary to stop growing addiction to what it once described as "spiritual opium".</p>.<p>Jefferies analysts said on Monday that they expected to see about a 3% impact to Tencent's earnings from the new rules, assuming gaming contributes about 60% of its total revenue. They also forecasted that its smaller rivals like NetEase will suffer limited impact.</p>.<p><strong>Also Read | <a href="https://www.deccanherald.com/international/china-tightens-limits-for-young-gamers-bans-school-night-play-1025109.html" target="_blank">China tightens limits for young gamers, bans school night play</a></strong></p>.<p>Mio Kato, an analyst who publishes on SmartKarma, said however that the market reaction "grossly underestimates" the impact of the restrictions.</p>.<p>"The root of the problem here is not the immediate revenue impact," he said. The problem is that this move destroys the entire habit-forming nature of playing games at an early age."</p>.<p>Shares in Krafton Inc, the Tencent Holdings-backed South Korean gaming company, fell 3.5%.</p>.<p>Tokyo-listed Nexon and Koei Tecmo, which both have exposure to the Chinese market, were down 4% and 3% respectively.</p>.<p><strong>Check out DH's latest videos:</strong></p>
<p>Shares of Tencent Holdings Ltd dropped nearly 3% on Tuesday, after China announced new rules forbidding under-18s from playing video games for more than three hours a week.</p>.<p>Beijing said the move was necessary to stop growing addiction to what it once described as "spiritual opium".</p>.<p>Jefferies analysts said on Monday that they expected to see about a 3% impact to Tencent's earnings from the new rules, assuming gaming contributes about 60% of its total revenue. They also forecasted that its smaller rivals like NetEase will suffer limited impact.</p>.<p><strong>Also Read | <a href="https://www.deccanherald.com/international/china-tightens-limits-for-young-gamers-bans-school-night-play-1025109.html" target="_blank">China tightens limits for young gamers, bans school night play</a></strong></p>.<p>Mio Kato, an analyst who publishes on SmartKarma, said however that the market reaction "grossly underestimates" the impact of the restrictions.</p>.<p>"The root of the problem here is not the immediate revenue impact," he said. The problem is that this move destroys the entire habit-forming nature of playing games at an early age."</p>.<p>Shares in Krafton Inc, the Tencent Holdings-backed South Korean gaming company, fell 3.5%.</p>.<p>Tokyo-listed Nexon and Koei Tecmo, which both have exposure to the Chinese market, were down 4% and 3% respectively.</p>.<p><strong>Check out DH's latest videos:</strong></p>