Tencent, other game titles tumble after Chinese media calls them “spiritual opium” for teens – .

0
19
Tencent, other game titles tumble after Chinese media calls them “spiritual opium” for teens – .


Charges of “spiritual opium” tumbled shares of Chinese multinational tech group Tencent and other companies in the gaming industry on Tuesday over fears that a new regulatory chapter was about to open.

Tencent 700,
-6,11%
the share fell 5% while NetEase 9999,
-7,77%

DETECTOR,
+2,77 %
And this AD 2400,
-8,12 %
each fell 8% in Hong Kong trade.

The losses came after an article in the Economic Information Daily, which has links to China’s state-controlled news agency, Xinhua, said the gaming industry, especially Tencent, was hurting people. adolescents in the country, according to media reports.

While the South China Morning Post subsequently reported that the story had been withdrawn, investors were rocked by fears that another regulatory crackdown could occur. It’s even as the South China Morning Post pointed out that the article didn’t appear to represent Beijing’s stance on the industry, noting positive comments from an official recently.

China is the world’s largest market for video games and esports, according to PwC China, with combined revenue reaching $ 31.5 billion last year. The revenue share of social and casual app-based games in China is expected to reach 71.8% of overall video game revenue by 2025, and part of Tencent’s revenue comes from games.

A separate crackdown on tech companies, including the music unit of Tencent, ride-sharing giant Didi Global DIDI,
+0,68 %
and education companies, have hit Chinese stocks, as well as their US-listed stocks in recent weeks.

Lis: Ray Dalio says Chinese stocks remain ‘important part’ of portfolio after crackdown

“After the past few weeks, even indirect warnings from the authorities are being ignored at your peril, and it looks like regulatory risk is still alive and well in China,” said Jeffrey Halley, senior market analyst, Asia Pacific, OANDA , in a note to clients.

Also: Video games have definitely entered the mainstream during the pandemic, but the industry faces a difficult transition

Tencent appeared to respond to the potential threat by announcing online time limits for minors who wish to play its games, and said it would ban those under 12 from spending money on them, according to Tencent. a statement on a reported WeChat account. by Bloomberg.

LEAVE A REPLY

Please enter your comment!
Please enter your name here