BEIJING/SHANGHAI: Shares of Tencent and other major Chinese gaming companies plummeted Tuesday after a state-run media article described online games as “spiritual opium”, prompting the tech giant to consider a playing ban on children under 12 altogether.
The criticism triggered fears among investors that online gaming was the next target for China’s communist rulers as they crackdown on Big Tech and other powerful sectors deemed to be out of control.
The Economic Information Daily, an arm of the government’s Xinhua news agency, complained about “widespread” online gaming addiction among children.
“The harmfulness of games has been increasingly recognised by society, and they are often referred to as ‘spiritual opium’ and ‘electronic drugs’,” it said.
The article cited views that “no industry or sport should develop in a way that wrecks a generation”.
Shares in Tencent, one of China’s biggest tech firms that is behind “Honor of Kings” and other global blockbuster games, dived more than 10 percent in Hong Kong shortly after the publication of the article.
Tencent’s shares closed over 6 percent lower while rivals NetEase and XD Inc, which also tumbled, ended down around 8 percent in Hong Kong.
The fallout spread to Japanese gaming stocks, with shares of online game company Nexon sliding more than 6 percent as well in Tokyo.
China’s blue-chip index were unchanged on Tuesday, but chip-makers led a decline in tech shares amid mounting regulatory concerns.
The blue-chip CSI300 index was flat at 4,934.46 points. The Shanghai Composite Index lost 0.5% to 3,447.99 points.
Tech shares fell sharply. Shanghai STAR50 Index slumped 2.2%, while Shenzhen’s start-up board ChiNext dropped 1%0.
Prospects of slower economic growth dented risk appetite. “We expect industrial production and exports to moderate, while investment and consumption may continue their slow recovery,” Citi wrote a note on Tuesday.
China’s CSI All Shares Semiconductor & Semiconductor Equipment Index tumbled over 6% on news that Chinese regulators launched an investigation into chip distributors in the auto industry, with a focus on price gouging.—Agencies
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