Shares of Tencent and NetEase plunged in Asian trading after Chinese state media branded online gaming “opium” and likened it to a drug.
The government-run media outlet also called for further restrictions on the gaming industry in order to prevent addiction and other negative impacts on children.
Tencent shares fell more than 10% at one point and closed 6% lower on the news, while NetEase closed down almost 8% in Hong Kong trading. Tencent is one of the world’s largest gaming companies responsible for high-profile, popular games such as “Honor of Kings.”
The article, by “Economic Information Daily,””a Chinese state-run publication that’s affiliated with the official Beijing run “Xinhua” newspaper, said that online gaming addiction among children is “widespread” and could negatively impact their growth.
The sentiment in the article is not new. In 2018, Beijing froze new game approvals over concerns that gaming was impacting children’s’ eyesight. In China, online games require approval from regulators.
And, in 2019, China brought in rules that banned people under age 18 from playing online games between 10 p.m. and 8 a.m. and restricted the amount of time they could play.
The Chinese government has been cracking down on technology companies within its own borders, taking aim in previous months on e-commerce sites, music streaming services and overseas initial public offerings by Chinese companies.