Chinese state media called online video games “mental opium”, causing the stocks of Tencent and other game companies to plummet.
After a Chinese official media referred to online video games as “mental opium,” the share price of Tencent Holdings Co., Ltd. is expected to record its biggest decline in 10 years on Tuesday, raising concerns that the industry may become the next target for regulators.
Shares of China’s largest social media and video game companies fell more than 10% in early trading, evaporating nearly $60 billion in market value.
Competitor NetEase’s share price fell as much as 15.7%, while the share prices of game developer XD Inc and mobile game company GMGE Technology Group Ltd also plummeted.
The National Economic Information Daily said in an article on Tuesday that many teenagers are addicted to online video games and called for more restrictions on the industry. The media is affiliated with Xinhua News Agency, China’s largest official news agency.
The newspaper repeatedly cited Tencent’s flagship game “Glory of the King”, saying it is the most popular online game among students, sometimes playing for up to eight hours a day.
The newspaper said: “No industry or any sport can develop in a way that destroys a generation,” and compares online video games to “??electronic drugs.”
Tencent did not respond to Reuters’ request for comment.
The government has pledged to strengthen regulations on online gaming and education to protect the well-being of children. Last month, it banned for-profit tutoring in core school subjects, a move that could destroy China’s $120 billion private tutoring industry.
In online video games, the authorities are trying to limit the time young people can play. Companies including Tencent have implemented anti-addiction systems, which they say have restricted the game time of young users.
“Economic Information Daily” quoted legal experts and professors as saying that the current restrictive measures cannot keep up with the development of the industry to prevent youth addiction, and there should be more “coercive means” to increase the social responsibility of video game companies.
Due to increased regulatory actions on online platforms, Tencent is already under pressure along with its large technology counterparts. Last month, it was barred from signing exclusive music copyright agreements and fined for unfair market behavior.