Tencent’s value drops $ 60 billion after China calls online games “electronic drugs”
What just happened? The Chinese government has never had the most positive view of video games, to say the least, but its latest review of online titles was so harsh – calling them “electronic drugs” – that it caused Tencent and NetEase shares to fall by more than 10%. It also led Tencent to introduce restrictions for minors.
In an article published Tuesday, the state newspaper Economic Information Daily said many teens are now addicted to online games and are having a negative effect on young people. He also called for more restrictions. The outlet is affiliated with China’s largest state-run news agency, Xinhua.
Tencent’s hugely popular honor of kings was cited in the article. As of November 2020, it had over 100 million active players per day. The outlet writes that many users spend eight hours or more playing the game each day.
“No industry, no sport can be allowed to develop in a way that will destroy a generation,” he said, comparing online games to “spiritual opium worth hundreds of billions” .
Tencent shares fell more than 10% in morning trading, wiping out nearly $ 60 billion from its market cap, writes Reuters. Shares of NetEase were down 15.7%, and game developer XD Inc and mobile game company GMGE Technology Group Ltd also saw their shares fall. China’s video game market was worth $ 43.1 billion in 2020
Tencent, in a post posted on social media, said it was introducing measures to cap the number of hours minors devote to honoring kings after “competent authorities” demanded greater protection for young players and for companies to fulfill their “social responsibility”. Additionally, those under 12 will be prohibited from spending in the game, and additional efforts will be made to prevent minors from using adult accounts. The company said it plans to extend the restrictions to all of its games eventually.
Main image credit: pandaily.com