China’s Tencent has cracked down on how long children can play its flagship video game, hours after an article in state media described online gaming as “spiritual opium” and compared it to “electronic drugs”, sending its shares sliding.
The article in the Economic Information Daily (EID), which is affiliated with China’s biggest state-run news agency Xinhua, called for more restrictions on the industry to prevent “widespread” addiction among children.
While it did not mention China’s largest social media and video game firm by name, it criticised Tencent’s flagship game Honor of Kings, the world’s top-grossing game for the past two years. It said this was the most popular game among students, who played it for up to eight hours a day.
“No industry, no sport, can be allowed to develop in a way that will destroy a generation,” the article said. “Society has come to recognise the harm caused by online gaming and it is often referred to as ‘opium for the mind’ or ‘electronic drugs’.”
The article wiped $60bn (£43bn), or almost 11%, off Tencent’s market capitalisation as investors feared that gaming would become the latest target of a regulatory crackdown on China’s biggest technology companies. However, the company’s shares rallied to end 6% down after the article was deleted online just a few hours after publication.
“Fears over Chinese regulatory interference aren’t going away, with Tencent the latest stock to slump on chatter about Beijing seeking to wield its power,” said Russ Mould, the investment director at AJ Bell. “[Tencent’s shares] are now down by more than a fifth year to date as investors reassess their willingness to have exposure to big Chinese names.”
A separate opinion piece published by the China News Service on its Weibo account, a Twitter-like service, hours after the Economic Information Daily piece, took a softer stance, saying that “schools, games developers, parents and other parties need to work together”.
In a social media post, hours after the EID piece appeared, Tencent announced a range of new measures after it said “relevant authorities” had requested greater protection of minors in gaming and for companies to carry out their “societal responsibility”.
The new restrictions, which will initially apply only to Honor of Kings, will stop under-12s from spending money in the game and further reduce the duration they can play each day from 1.5 hours to one hour normally, and from three hours to two hours on holidays. The new restrictions are tougher than those required by the authorities.
Tencent also raised proposals for the entire industry to consider including a ban on gaming for children under 12. Chinese authorities have sought to limit the amount of time minors spend playing video games, including a temporary ban on new video game licences in 2018.
In the past year China has embarked on a regulatory crackdown to curb the growing power of big tech companies.
Last month, China’s anti-trust regulator ordered Tencent to give up its exclusive music licensing rights and fined the company for anti-competitive behaviour.
In April, Alibaba paid a record $2.8bn fine to settle an anti-monopoly investigation. Earlier this year Beijing ordered Alibaba to sell off some of its media assets, which include Hong Kong’s South China Morning Post. It previously blocked the planned $34bn flotation of the online payments subsidiary Ant Group.