Tencent shares slump after online games branded ‘spiritual opium’ and ‘electronic drugs’ by Chinese state media
Shares in China’s biggest online gaming companies slumped after state media branded their products “spiritual opium” and compared them to “electronic drugs”.
The criticism – as reported by Reuters news agency – has stoked concerns that the online gaming sector will be the next to receive unwanted attention from Beijing’s regulators, following a crackdown on tech giants in the country.
Tencent’s stock tumbled by more than 10% in morning trade on Tuesday, wiping almost $60bn from its market capitalisation.
Smaller rival NetEase dropped by more than 15%, while fellow companies XD Inc and GMGE Technology Group Ltd also fell.
It followed an article published by the state-run Economic Information Daily that warned teenagers were addicted to online video games and called for the industry to be curbed.
The newspaper particularly criticised Tencent’s flagship game Honour Of Kings, which it reported was sometimes played by students 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 newspaper wrote, comparing online video games to “electronic drugs”.
The newspaper called for “mandatory means” to force online gaming companies to prevent addiction among young players.
Tencent – which was behind the development of the latest Pokemon game released last month – said it would introduce new measures to limit access to its games and the time spent on them by children.
However, the article was deleted from the Economic Information Daily’s account on WeChat, settling the market and encouraging Tencent’s share price to recover.
Some gaming mechanics have been criticised in the UK, especially so-called “loot boxes” – mystery packs of gaming items which gamers can buy with real money to try and improve their online team.
They feature on games like FIFA Ultimate Team, often promoted by influential celebrities or YouTube stars. Each transaction can cost anywhere between 79p to £79.99 and the FIFA points can then be used to buy what is, in effect, a lucky dip of players.
Gambling support groups and charities are warning that lockdown may have caused more children to become addicted to these loot packs.