Tencent Shares Drop After China Media Criticizes Video Games

Shares of Tencent Holdings and different outstanding Chinese language video-game corporations plunged in Hong Kong buying and selling on Tuesday after a Beijing-affiliated media outlet referred to as their merchandise “religious opium.”

The blast from the state-affiliated media outlet, the Financial Data Each day, got here after months of elevated strain from Beijing aimed on the broader Chinese language web trade, which serves one billion customers. That strain has moved international traders to tug billions of {dollars} out of Chinese language know-how shares, on fears that tighter regulation might harm firm prospects.

The article from the Financial Data Each day didn’t declare that any particular coverage adjustments can be made, and it was unclear whether or not it mirrored the views of Beijing officers or merely these of the publication’s editors.

Additional including to the uncertainty, the hyperlink to the article went useless in a while Tuesday, although a duplicate might nonetheless be discovered on the location of Xinhua, the official state information company, which controls the Financial Data Each day.

Regardless of the uncertainty, nervous traders have been fast to promote shares.

Tencent, a know-how conglomerate with a giant presence in social media and leisure along with video video games, noticed its shares drop about 10 p.c at one level, although the losses moderated in a while Tuesday and ended down about 7 p.c. NetEase, one other mainland online game firm, noticed its shares drop practically 9 p.c.

The article’s headline — “A ‘religious opium’ has grown into an trade price tons of of billions of {dollars}” — left little doubt on the thrust of the piece. It cited a litany of threats posed by video video games, together with diverting consideration from faculty and household and inflicting nearsightedness.

“No trade or sport ought to develop on the value of destroying a era,” it mentioned.

The article singled out Tencent, which owns video games widespread in China like Honor of Kings in addition to titles widespread world wide, like League of Legends.

Tencent on Tuesday launched a press release on its WeChat social media community describing a number of the limits it not too long ago determined to place into place, like limiting sport time for minors and elevated efforts to ferret out those that lie about their age to play.

The scrutiny isn’t new to Tencent or the trade. Greater than half of Chinese language web customers play on-line video games, in line with authorities statistics. Up to now, officers have nervous that video games might harm youngsters’s lecturers, injury their eyesight and cut back the nation’s army readiness. In 2019, the authorities restricted the period of time younger folks might spend enjoying video games on-line.

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