Tencent’s value plummets $ 60 billion after China calls online games ‘e-drugs’

What happened now? The Chinese government has never had the most positive outlook on video games, to put it mildly, but its latest criticism of online games was so harsh – they called them “e-drugs”, which led to shares of Tencent and NetEase dropping more than 10%. This also led Tencent to impose restrictions on minors.

In an article published on Tuesday, the state-run Economic Information Daily reported that many teens are addicted to online gaming, which has a negative impact on young people. This also required additional restrictions. The publication is associated with Xinhua, the largest state news agency in China.

The article mentioned the extremely popular Tencent Honor of Kings. As of November 2020, it has over 100 million daily active players. The publication writes that many users spend eight or more hours playing every day.

“No industry, no sport, can evolve to wipe out an entire generation,” the statement said, comparing online gaming to “a spiritual opium worth hundreds of billions.”

Tencent shares fell more than 10% in morning trading, shedding nearly $ 60 billion from its market capitalization. Reuters… NetEase shares fell 15.7%, games developer XD Inc and GMGE Technology Group Ltd also fell. China’s video game market was valued at $ 43.1 billion in 2020

Tencent said in a social media post that it is introducing measures to limit the number of hours minors spend at Honor of Kings after “relevant authorities” have demanded more protection for younger players and for companies to fulfill their “social responsibility.” … In addition, anyone under the age of 12 will be prohibited from spending money in the game, and additional efforts will be made to prevent minors from using adult accounts. The company said it plans to eventually lift the restrictions on all of its games.

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