Tencent, NetEase fall after China tightens gaming rules

Shares of Tencent and NetEase tumbled on Thursday after Chinese regulators urged firms to protect children. Yahoo Finance's Dan Howley shares the details.

Video transcript

JULIE HYMAN: And I want to bring it back to the US for a second, Dan, because I know you are also reporting on some developments on the gaming industry here in the US. And Amazon, right, is announcing some developments in terms of cloud gaming. Can you talk to us about that?

DAN HOWLEY: Yeah. So their Luna service, their Luna cloud gaming service, which is still in early access, meaning that it's not a full release, has been available for about a year. It's about $5.99 a month if you want to get access to their channel where you can get unlimited access to a certain number of games. $14.99 to get access to Ubisoft's game channel to get unlimited access to Ubisoft games as well.

This time around, what they're doing is expanding the catalog of games that are available. And they have two features, a family channel so that you could play games with younger kids. They're not going to have any kind of advertising in it, obviously, since you're paying for the service. And it will be age-appropriate things as well as less frustrating titles. So if you're a parent and you want to play with your kids, you can do that as well.

The other thing that they're announcing is something called Luna Couch. And this is really cool because what it does is it takes local co-op games, that means games that you really need to be sitting on the same couch with someone to play, and it allows you to play them online. Now, I know it seems odd because there's online gaming, obviously. But local co-op games still exist. And it can be frustrating because you may want to play them with people who aren't sitting next to you at that time.

So this will allow you to send a code to your friends. They just have to load up Luna. They don't need a subscription. You just use your subscription to fire away. So it's a good way for Amazon to get people into Luna. They're also offering a seven-day trial where you'll get access to a number of free games for a limited time.

And so this is all kind of its effort to build out Luna. They're obviously very dedicated to gaming. They've been pushing this for some time. As well as a way to take on both Microsoft and Google, Microsoft has its Xbox Xcloud or cloud gaming platform. That does very well. $14.99, you get unlimited access to more than 100 games. As well as Game Pass, which I mean, overall, it's just a ridiculously good deal.

And then there's Google's Stadia, which is also available. But the difference is you don't get unlimited access to games. You have to purchase those games first. And then you get access to them. So Google's been struggling with Stadia. They shut down their Stadia Studios.

Amazon's still working on some of its own games, though it pulled some back that it had previously released. Microsoft really killing it here as far as cloud gaming goes. But look, Amazon, if it continues to do innovative new things like this Luna Couch, could really catch up for them.

BRIAN SOZZI: Dan Howley, always nice to see you. We'll check back with you later.