What's going on?

On Wednesday, Tencent � Chinese internet conglomerate (and little brother to 50 Cent) � reported second-quarter earnings that were no fun and games.

What does this mean?

It doesn�t look like Tencent will be In Da Club anytime soon. The company reported a drop in profit, its first in nearly 13 years. Since January (when the stock price was at a record high), Tencent has lost around $170 billion in market value � that�s equivalent to the entire value of Disney.

Tencent�s been hit by Chinese video game regulators blocking sales of unreleased and existing games (like Monster Hunter: World, of which Tencent had pre-sold over a million copies). China has some of the world�s most stringent approval processes for video games and is in the midst of a havoc-wreaking licensing freeze � no new games have been approved for four months. Tencent can�t make as many dollars while it�s waiting on approvals � nearly 40% of its revenue comes from online games, and likely even more of its profit.

Why should I care?

The bigger picture: What China says goes.

China�s a market with notoriously tough rules � its video game regulation is an extension of its censorship of all online content (to which nobody�s exempt, not even Google). The country�s the largest gaming market in the world, probably making it worth the trouble � even with all the regulatory hoops. But there�s a reason for the Chinese versions of many Western companies � like WhatsApp and WeChat, Amazon and Alibaba, Netflix and iQiyi (not to mention Pied Piper and New Pied Piper) � China�s hard to please.

For markets: China�s a cool kid.

China�s hot for more than just games � everybody wants a piece of the world�s second-largest economy. American grocery retailer Kroger�s getting in via a partnership with ecommerce giant Alibaba. The king of �marts, Walmart, has opened a small supermarket in Shenzhen, and Starbucks is expanding its Chinese offering � rolling out a new store every 15 hours.