Tencent vows fresh gaming curbs following ‘spiritual opium’ attack zaps $60 billion

SHANGHAI, Aug 3 (Reuters) – China’s Tencent Holdings Ltd (0700.HK) claimed on Tuesday it would further more control minors’ entry to its flagship video clip video game, hrs immediately after its shares have been battered by a condition media write-up that described on-line game titles as “spiritual opium”.

Economic Facts Day by day cited Tencent’s “Honor of Kings” in an post in which it mentioned minors had been addicted to on the internet online games and called for much more curbs on the market. The outlet is affiliated with China’s major point out-run information agency, Xinhua.

The broadside re-ignited investor fears about condition intervention right after Beijing experienced now focused the residence, training and know-how sectors to suppress price tag pressures and reassert the primacy of socialism just after a long time of runaway industry growth. examine far more

“They do not believe anything is off restrict and will respond, in some cases overreact, to anything on condition media that suits the tech crackdown narrative,” reported Ether Yin, husband or wife at Trivium, a Beijing-primarily based consultancy.

China’s largest social media and video clip sport company noticed its inventory tumble a lot more than 10% in early trade, wiping practically $60 billion from its market capitalisation.

The inventory was on keep track of to drop the most in a ten years right before trimming losses right after the report vanished from the outlet’s web site and WeChat account on Tuesday afternoon. The write-up later on reappeared later in the working day with the traditionally loaded expression “non secular opium” removed and other sections edited. The inventory finished down 6.1%.

Shares of European and U.S. gaming companies also took a hit.

Activision Blizzard (ATVI.O)which has the largest exposure to Chinese markets amongst its U.S. friends and was owing to report right after the closing bell, was down 3.8%.

Digital Arts (EA.O), the company powering Sims, was down 2.8%. Just take-Two Interactive Software package (TTWO.O), which gave an annual forecast late on Monday that unhappy traders, was down 7.6%.

Shares of Amsterdam-mentioned Prosus (PRX.AS), which retains a 29% stake in Tencent, fell 6.9%, whilst European on line video gaming stocks Ubisoft (UBIP.PA) and Embracer Team (EMBRACb.ST)fell about 5% and 3.7%, respectively.

In the original write-up, the newspaper had singled out “Honor of Kings” as the most popular on the internet match amid students who, it said, played for up to eight several hours a day.

“‘Spiritual opium’ has developed into an sector value hundreds of billions,” the newspaper said. “No field, no activity, can be authorized to produce in a way that will destroy a generation.”

Visitors are observed at the Tencent Online games booth for the duration of the China Digital Entertainment Expo and Conference, also recognized as ChinaJoy, in Shanghai, China, July 30, 2021. REUTERS/Aly Tune/File Picture

Opium is a sensitive matter in China, which ceded Hong Kong island to Britain “in perpetuity” in 1842 at the close of the First Opium War, fought about Britain’s export of the drug to China exactly where habit grew to become prevalent.

Tencent in a assertion explained it will introduce extra measures to lessen minors’ time and cash spent on game titles, starting off with “Honor of Kings”. It also referred to as for an market ban on gaming for small children under 12 yrs outdated. go through far more

The corporation did not handle the write-up in its assertion, nor did it respond to a Reuters ask for for comment.

The short article also strike rivals’ shares. NetEase Inc (9999.HK) dropped extra than 15% before paring losses to conclusion down 7.77%. Video game developer XD Inc (2400.HK) fell 8.1% and cellular gaming corporation GMGE Technological know-how Group Ltd (0302.HK) dropped 13.59%.

Exterior of gaming, buyers were also caught off guard by the Condition Administration For Market place Regulation (SAMR) on Tuesday saying it would look into vehicle chip distributors and punish any hoarding, collusion and cost-gouging. The semiconductor stock index (.CSIH30184) subsequently fell more than 6%. browse extra

Little one WELLBEING

The reposted Financial Data Daily article, in a shift of tone, mentioned that authorities, video game developers and families experienced to do the job together to beat boy or girl dependancy to on-line video clip game titles, and moms and dads experienced to be accountable for supervision.

Chinese regulators have since 2017 sought to limit the total of time minors spend taking part in online video video games and corporations which include Tencent presently have anti-addiction units that they say cap younger users’ sport time.

In exercise, it is difficult for corporations to stop children accessing online games on the net for the reason that buyers can lie about their age.

But authorities have in new months put clean focus on shielding boy or girl wellbeing, and claimed they want to further strengthen rules all over on line gaming and education. Past thirty day period, they banned for-earnings tutoring in core faculty subjects, attacking China’s $120 billion private tutoring sector. examine additional

That extra to other regulatory action in the know-how field, together with a ban on Tencent from distinctive songs copyright agreements and a fantastic for unfair sector tactics. read through a lot more

At a single level on Tuesday, Tencent was briefly de-throned as Asia’s most-important company by market capitalisation by chipmaker Taiwan Semiconductor Production Co Ltd (2330.TW).

Reporting by Samuel Shen and Brenda Goh Further reporting by Yingzhi Yang in Beijing, Tom Westbrook in Singapore, Andrew Galbraith and Josh Horwitz in Shanghai and Caroline Valetkevitch in New York Modifying by Vidya Ranganathan, Christopher Cushing and Nick Macfie

Our Criteria: The Thomson Reuters Rely on Concepts.