Tencent tanks 10% after Chinese media calls online gaming ‘opium’ as regulatory concerns mount
August 03, 2021 @ 08:52 +03:00
Shares of Tencent and NetEase plunged on Tuesday after Chinese state media branded online gaming “opium” and likened it to a drug. The article also called for further restrictions on the industry in order to prevent addiction and other negative impacts on children. However, the article was deleted a few hours after publication. Tencent shares fell around 10% in the morning, while NetEase was almost 14% lower in Hong Kong. Shares pared losses later in the day but were still substantially lower. Tencent is one of the world’s largest gaming companies responsible for high-profile games like “Honor of Kings.”
The article, by Economic Information Daily, a Chinese state-run publication that’s affiliated to the official Xinhua newspaper, said that online gaming addiction among children is “widespread” and could negatively impact their growth.
The article said that in 2020, more than half China’s children were nearsighted and online games affects their education. The sentiment in the article is not that new. For a long time, the Chinese government has been concerned about the impact of video games on minors. In 2018, Beijing froze new game approvals over concerns that gaming was impacting youngsters’ eyesight. In China, online games require approvals from the regulators. In 2019, China brought in rules that banned those under 18 years from playing online games between 10 p.m. and 8 a.m. and restricted the amount of time they could play.
Tencent tanks 10% after Chinese media calls online gaming ‘opium’ as regulatory concerns mount, CNBC, Aug 3