Tencent and NetEase’s shares plunged on Tuesday after a state-owned Chinese newspaper called online gaming ‘opium for the mind’ and ‘electronic drugs’, triggering fears that the government could soon impose even more restrictions for the gaming companies.
The article by China’s Economic Information Daily, which was removed after a few hours, said that online gaming addiction is becoming more and more ‘widespread’ leaving a negative impact on children’s development.
‘’Spiritual opium’ has grown into an industry worth hundreds of billions,” the article said.’’….No industry, no sport, can be allowed to develop in a way that will destroy a generation.”
It specifically addressed Tencent’s popular Honor of Kings title saying that minors spend hours everyday playing this game. The news agency interviewed a student for the article who said that some schoolmates play the game up to eight hours a day.
The article said that further restrictions should be introduced in order to prevent addiction and put a stop to the negative impacts on children’s development.
Following the news, Tencent’s shares dropped as much as 10% in early trade causing a $60 billion loss in its market capitalization, while NetEase shares dropped 15%.
However, Tencent shares closed the day about 6% lower, while NetEase closed nearly 8% lowever in Hong Kong, with both companies recouping previous losses.
Tencent restricts Honor of Kings playtime for minors
Shortly after the release of the article, Tencent announced on its official WeChat account that it would introduce new restrictions to prevent online gaming addiction among children.
The company said that the time limit for minor players will be reduced from 1.5 hours to 1 hour on non-holiday days and from 3 hours to 2 hours on holiday days.
In 2019, the Chinese government passed a law banning minors from playing video games between 10 PM and 8AM or for more than 90 minutes on weekdays.
The company also said that minors under the age of 12 will be banned from spending money on in-game purchases.
The new restrictions will start with Honor of Kings and will expand to other titles of the company over time.