Shares of Chinese video game company, Tencent, along with other notable names in the video gaming industry, such as NetEase and Bilibili have been steadily falling. This comes after the Chinese media termed the activity of playing video games “spiritual opium”. In recent times, the Chinese government has been increasing its scrutiny of video gaming activities.
Prior to this likening of the activity to an addiction and calling video games the “opium for the mind”, Economic Information Daily, owned by the Chinese state, on Tuesday, had published an article. In this article, elaboration was made on all the ill-effects that excess gaming can have on people, especially children. Listing them, and highlighting on opinions of experts, the article had appealed for tighter and greater regulations for the same.
Tencent Stocks Plummet as Chinese Media
Compare Video Games to Drugs
Featuring interviews from experts, the article called for more socially responsible behaviours from the gaming platforms. The article stated that these companies should not only be chasing for profits and demanded for stricter regulatory penalties. Following the publishing of this article, this morning’s Hong Kong trading saw a steep fall in the stock prices of well-known companies in the gaming industries. Tencent’s stocks fell by almost 10%, Bilibili Inc.’s stocks took a 14% drop while NetEase saw a 15% drop in its stock prices.
China’s concern over online video games and its impact on people, especially children, is nothing new. However, with the Chinese government tightening the noose on the technology companies, over issues such as their financial stability, data security, data integrity, for quite some time now, companies such as Tencent and others are facing the heat. Another sector that is facing strict scrutiny of the government is the for profit, after school tutoring business. What remains to be seen now, is how this scrutiny will impact the investors and the stakeholders.