Tencent
“This game is a drug! How many times have you said such a phrase to emphasize your liking for a video game? Apparently in China the comparison is no longer a hyperbole, but a real accusation that is causing economic damage to its own industry. It has come to the point that Tencent, the famous videogame giant, has had to take steps to impose new restrictions on minors for its video games in terms of micro-transactions and playing time.The Economic Information Daily ( EID), a Chinese media linked directly to the government through the supervision of the country's official state news agency called Xinhua, has harshly attacked video games and how children are used in recent days, calling the medium "spiritual opium". The reason for this comparison is that, according to the news outlet, online games are addictive in children. At the end of the article, the EID asks the Chinese video game industry to put more brakes on to safeguard minors.
In the moments following the publication of the article, Tencent would have lost about 60 billion dollars on the stock market. The reason for this loss, in addition to the fact that the company is one of the largest in the world, is due precisely to the EID article which, in particular, lashed out against Honor of Kings, a mobile MOBA belonging to Tencent. According to the article, children play this game for up to eight hours a day: “Spiritual opium has become an industry worth hundreds of billions. No industry and no sport can be allowed to develop in a way that can destroy a generation. "
There has not yet been any official comment from Tencent regarding the situation, but its response came quickly with decisive action: within hours of the article's publication, the Chinese company released a series of limitations aimed precisely at limiting the playing time and the money spent by children under 12 years of age: these minors can no longer spend any coins in the game, and from now on they are also prevented from playing more than an hour per day (two hours on holidays).
Trying to limit and educate children to play in a healthy way is not new even in the Western world: Microsoft itself has recently released a useful app for parents in their children's gaming monitoring. It is the way in which these issues are addressed in China that are worrying, especially for the privacy issue. Recall that some time ago China had introduced facial recognition technology in video games, with the excuse of wanting to monitor the playing time of children who, according to the laws of the nation, cannot play after midnight. We talked about privacy issues in this article.
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China’s Tencent limits gaming for minors after media outcry
Visitors gather at a display booth for Chinese technology firm Tencent at the China International Fair for Trade in Services (CIFTIS) in Beijing on Sept. 5, 2020. China's biggest gaming company Tencent Holdings said Tuesday, Aug. 3, 2021, that it would limit gaming time for minors and ban children under 12 from making in-game purchases after a state media article called games 'spiritual opium' on Monday. (AP Photo/Mark Schiefelbein)
Visitors gather at a display booth for Chinese technology firm Tencent at the China International Fair for Trade in Services (CIFTIS) in Beijing on Sept. 5, 2020. China's biggest gaming company Tencent Holdings said Tuesday, Aug. 3, 2021, that it would limit gaming time for minors and ban children under 12 from making in-game purchases after a state media article called games 'spiritual opium' on Monday. (AP Photo/Mark Schiefelbein)
HONG KONG (AP) — China’s biggest gaming company, Tencent Holdings, said Tuesday it will limit gaming time for minors and ban children under age 12 from making in-game purchases after a state media article called games “spiritual opium.”
Tencent’s pledge to curb gaming for minors came hours after the company’s stock plunged as much as 11% following a critique published by the Economic Information Daily, a newspaper affiliated with China’s official Xinhua News Agency.
The newspaper article named Tencent’s wildly popular Honor of Kings game as one that minors were addicted to, and cited a student as saying that some played the game for eight hours a day. The online article was removed hours later.
“‘Spiritual opium’ has grown into an industry worth hundreds of billions,” the newspaper said, adding that no industry should be allowed to develop in a manner that will “destroy a generation.”
On Tuesday, Tencent said in a statement it will limit gaming time for minors to one hour a day, and two hours a day during holidays. Children under age 12 will also be prohibited from making purchases within the game, the company said.
Under Chinese law, users under age 18 can play online games for a maximum of one and a half hours a day, and three hours during holidays.
Tencent also called for the industry to control gaming time for minors and discuss the possibility of banning those younger than 12 from playing games.
It was not clear if Tencent issued the curbs in light of the article. The company did not immediately comment.
The critique of the gaming industry sparked a selloff of stocks in Chinese gaming companies including NetEase amid fears that the gaming industry could be the next to experience a clampdown.
Chinese authorities in recent months have targeted e-commerce and online education, implementing new regulations to curb anti-competitive behavior after years of rapid growth in the technology sector.
Last month, authorities banned companies that provide tutoring in core school subjects from turning a profit, wiping out billions in market value from online education companies such as TAL Education and Gaotu Techedu.
“Obviously there’s great concern over policy uncertainty because this is not just about online education, there was also talk about data security and now, about mobile games,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.
“So the future will be highly uncertain, it is difficult to give a fair valuation on these stocks and investors will take a wait-and-see approach and be relatively prudent in this sector as we don’t know what will happen next.”
Tencent’s stock price closed down 6.11% at 446 Hong Kong dollars on Tuesday.