China regulators ask Tencent to take down new video game days after launch

Tencent Holdings Ltd. took another hit to its gaming business, after regulators told the social media giant to remove Monster Hunter: World from its PC downloads service just days after the action title's debut.

Parts of the Capcom Co. hit failed to meet regulatory standards and the relevant authorities received a "significant amount of complaints," which in turn spurred the government to revoke an operating license, Tencent said in a statement without elaborating. Tencent shares fell 2.4 percent on Monday, while Capcom's stock slumped almost 10 percent.

It's the latest blow to Tencent's gaming operation, which has faced a series of hiccups. The company hasn't won the necessary approval to begin generating money from its marquee mobile game, PlayerUnknown's Battlegrounds, and has yet to receive the green light for introducing the desktop version to China. That's hobbled revenue growth at the internet giant and contributed to a 15 percent slide in its stock since June.

"Tencent used to be world-class gaming & social media company, but has transformed into a massive multi-sector VC operation with important gaming & social media sidelines," said Brock Silvers, managing director of Kaiyuan Capital, a China-based advisory. "The recent fumbling of core gaming operations is a worrying trend, and investors can reasonably begin to ask if constant investment and competition with Alibaba are causing Tencent to lose focus."

While Tencent's run into issues with the industry's overseers in the past -- notably when state media rounded on its inhouse-developed Honour of Kings for allegedly encouraging addiction -- it's unusual for the giant internet firm to encounter multiple obstacles at once.

The Radii blog first reported on the game's suspension. Japanese studio Capcom's title has sold more than 8 million copies globally. The series, where players hunt the titular beasts, has been popular in Japan for over a decade. With the new title, Capcom re-designed many elements specifically tailored for Western audiences, such as including more online play and letting players move freely through the game.