Shares of Chinese video gaming company Tencent crashed by their most in a decade on Tuesday, after a Chinese state media outlet called online video games “spiritual opium”, raising concerns about the “dangers of video gaming” and calling for more regulations in the gaming industry.
Tencent lost almost $60 billion in market capitalization as it saw its stock plummet more than 10 percent in morning trade. Shares of other gaming companies were not left out in the plunge. Rival company NetEase saw its shares slump as much as 15.7 percent before paring losses to sit around 8 percent lower in late afternoon trade. Shares of game developer XD Inc. and mobile gaming company GMGE Technology Group Ltd also fell by 8.2 percent and 15.6 percent respectively.
State-run Economic Information Daily, affiliated with China’s biggest state-run news agency, Xinhua, said in an article on Tuesday that many teenagers were addicted to online video games, hence the term “spiritual opium.” The newspaper requested that more restrictions be placed on the gaming industry, which in their opinion, was causing more harm than good.
Tencent’s flagship game “Honor of Kings” was especially singled by the agency and described as the most addictive and most popular among students, who sometimes played for up to eight hours a day.
The newspaper also described online video games as “electronic drugs” and said that “no industry, no sport, can be allowed to develop in a way that will destroy a generation.”
The Chinese government has promised to increase regulations and impose restrictions on online gaming to protect the well-being of children and teenagers. The authorities have made the move to limit hours that teenagers can play, and companies including Tencent have implemented anti-addiction systems that they say sets a limit to the amount of time young users spend on gaming. In a statement posted on one of its official WeChat accounts, Tencent said that players under the age of 12 will be prohibited from spending money in the game, and time restrictions on minors will also be tightened from 1.5 hours to 1 hour on non-holidays, and from 3 hours to 2 hours on holidays.
The Economic Information Daily, citing legal experts and professors, called for more stringent restrictions and ‘mandatory means” to increase the social responsibility of video game companies, saying that the regulations already in place were not able to keep up with the sector’s rapid development to prevent youth addiction.
Tencent, alongside major tech companies, has already been under pressure by increased regulatory action on online platforms. Last month, it was ordered by Chinese regulators to give up its music exclusivity rights and was also fined for unfair market practices.