Tencent vows fresh gaming curbs after ‘spiritual opium’ attack

SHANGHAI • China’s Tencent Holdings Ltd. said on Tuesday it would further curb minors’ access to its flagship video game, hours after its shares were battered by a state media article that described online games as “spiritual opium.”

Economic Information Daily cited Tencent’s “Honor of Kings” in an article in which it said minors were addicted to online games and called for more curbs on the industry. The outlet is affiliated with China’s biggest state-run news agency, Xinhua.

The broadside reignited investor fears about state intervention in China after Beijing had already targeted the property, education and technology sectors to curb cost pressures.

“They don’t believe anything is off limit and will react, sometimes overreact, to anything on state media that fits the tech crackdown narrative,” said Ether Yin, partner at Trivium, a Beijing-based consultancy.

China’s largest social media and video-game firm saw its stock tumble more than 10 per cent in early trade, wiping almost US$60 billion from its market capitalization.

The stock was on track to fall the most in a decade before trimming losses after the article vanished from the outlet’s website and Wechat account on Tuesday afternoon. The article later reappeared later in the day with the historically loaded term “spiritual opium” removed and other sections edited.

Shares in European and U.S. gaming companies also took a hit with Activision Blizzard, maker of Call of Duty, and Electronic Arts, the company behind Sims, both down around 2.3 per cent. Shares in Amsterdam-listed Prosus, which holds a 29 per cent stake in Tencent, fell more than 6 per cent, while European online video gaming stocks Ubisoft and Embracer Group fell 2.5 per cent and 4.7 per cent respectively.

In the original article, the newspaper had singled out Honor of Kings as the most popular online game among students who, it said, played for up to eight hours a day.

“‘Spiritual opium’ has grown into an industry worth hundreds of billions,” the newspaper said . ... No industry, no sport, can be allowed to develop in a way that will destroy a generation.”

Opium is a sensitive subject in China which ceded Hong Kong island to Britain “in perpetuity” in 1842 at the end of the First Opium War, fought over Britain’s export of the drug to China where addiction became widespread.

Tencent in a statement said it will introduce more measures to reduce minors’ time and money spent on games, starting with “Honor of Kings.”

It also called for an industry ban on gaming for children under 12 years old.