China's No.2 Internet games operator NetEase.com Inc said it has been notified by a Chinese government agency that its operation of the World of Warcraft game does not have proper approval.
Shares of NetEase were down 4.2 percent at $36.99 in early afternoon trading.
China's General Administration of Press and Publication posted a statement on its Website that the NetEase affiliate company that operates World of Warcraft should suspend charging users to play the game and not allow new account registrations, according to NetEase.
The agency is also evaluating whether to impose administrative penalties on Shanghai EaseNet, the NetEase affiliate, and that the agency was returning the affiliate's application for approval, NetEase said.
NetEase and Shanghai EaseNet said they believe they are in full compliance with applicable Chinese laws and that they are seeking clarification from the relevant authorities regarding the statement by the General Administration of Press and Publication.
NetEas licenses the online multiplayer game World of Warcraft from Activision Blizzard.
(Reporting by Alexei Oreskovic; Editing by Tim Dobbyn)