Gaming giant NetEase plunges nearly 7% after it delays release of Diablo Immortal in China

NetEase shares fell nearly 7% in Hong Kong on Monday after it announced plans to delay the release of Diablo Immortal in China.

The Chinese gaming giant said it will postpone the original June 23 release of the hotly-anticipated game but did not give a new launch date. Diablo Immortal, a mobile and PC game, was co-developed by NetEase and Activision Blizzard, the company Microsoft plans to buy.

The delay is due to the development team making some adjustments including support for a wider range of devices and network and performance optimizations, according to a statement on the game’s official website.

But NetEase and Blizzard’s move comes at a sensitive time for the Chinese game industry which is only just emerging from a months-long freeze of approvals from regulators.

The industry has faced intense scrutiny as part of a broader regulatory tightening on China’s domestic technology companies.

On China’s Twitter-like service Weibo, the official account of Diablo Immortal is banned from posting for “violating relevant laws and regulation.” It’s unclear which rules the account has broken.

NetEase declined to comment further on the delay of the game. Activision Blizzard was not immediately available for comment when contacted by CNBC.

Diablo is one of Blizzard’s most popular franchises and China is one of the world’s largest gaming markets. The delay will be a setback for NetEase which saw a slowdown in revenue growth in the first quarter of the year.

Diablo Immortal has been plagued by bad reviews by users on the website Metacritic, who have slammed the game for its microtransactions which they claim require large amounts of money to do well in the game.