New video game crackdown feared as Chinese state media warn of ‘spiritual opium'

Video game giant Tencent has lost £22 billion in stock value amidst concerns the Chinese government is planning more curbs on games.

The biggest video games company in the world isn’t American or Japanese, it’s Chinese. Few Western gamers will be familiar with the name Tencent but despite being the biggest publisher in their home country they also own League Of Legends maker Riot Games and Funcom, as well as major stakes in Supercell, Epic Games, and even 5% each in Activision Blizzard and Ubisoft.

So when Tencent stock suddenly crashes by over 10% that’s big news for the entire games industry. Especially as other Chinese publishers, like NetEase and Perfect World, were affected for the same reason: an article in state-run newspaper Economic Information Daily which described video games as ‘spiritual opium’ and ‘electronic drugs’.

The Chinese government itself has said and done nothing but many investors took this to mean an imminent crackdown on video games in general, causing Tencent to quickly announce new curbs on the amount of time children can play its games.

Follow the stock market crash though the article was quickly taken offline and the term spiritual opium, which is common in China and considered harsh criticism, was removed.

The general tone of the article was also softened, having originally insisted that, ‘No industry, no sport, can be allowed to develop in a way that will destroy a generation.’

That only worked to a degree, with Tencent’s stock drop levelling out to 6%, which still works out as a loss of £22-25 billion in market capital.

The reason for the article being changed is obvious but analysts believe that the Chinese government is genuinely concerned about video game addiction, while at the same time not wanting to damage the interests of some of its most successful entertainment companies.

Despite the changes to the article Tencent is moving ahead with plans to add new restrictions to game Honor Of Kings, which was mentioned by name in the original article, and will stop under-12s from making microtransactions and reduce the amount of time they can play from 1.5 hours on a normal weekday to just one hour.

This will be policed by a recently introduced facial recognition tool called Midnight Patrol, which is already used to prevent children from playing games between 10pm and 8am.

The move was made following requests from what Tencent describes as ‘relevant authorities’, with the company also suggesting that the whole games industry should consider a ban on gaming for children under 12 years old.

By being proactive (unlike publishers like EA and their repeated run-ins with Western governments over their use of loot boxes and microtransactions) Tencent hopes to avoid any changes being imposed on it by the Chinese government, although how likely that is to happen remains unclear.

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