Tencent Holdings, China’s largest gaming company, announced Tuesday that it would limit gaming time for minors as well as ban children under 12 from purchasing in-game items after a state media article labeled games “spiritual heroin.”
Tencent’s promise to stop gaming for minors was made just hours after its stock plummeted as much as 11% in response to a critique published on the Economic Information Daily, a newspaper associated with China’s official Xinhua News Agency.
Tencent’s popular Honor of Kings game was named in the newspaper article as one that minors were addicted. A student said that they played the game for eight hours per day. Hours later, the online article was deleted.
The newspaper stated that “Spiritual Opium” has become an industry that is worth hundreds of billions, and that it should not be allowed to grow in a way that would “destroy a whole generation.”
Tencent stated Tuesday that it would limit minor gamers’ gaming time to an hour per day and two hours during holidays. The company also stated that purchases made within the game by children under 12 years old will be strictly prohibited.
Users under 18 years old can only play online games during holidays and for up to one and a quarter hours per day.
Tencent called on the industry to regulate gaming time for minors, and discussed the possibility of banning children under 12 years old from playing video games.
It wasn’t clear whether Tencent had issued curbs following the article. The company didn’t immediately respond.
A critique of the gaming sector sparked a sell-off in stocks of Chinese gaming companies, including NetEase, amid fears that the gaming market could be next to face a clampdown.
Chinese authorities have been targeting e-commerce in China and online education in recent months. They are implementing new regulations to reduce anti-competitive behavior following years of technology sector rapid growth.
Authorities banned tutoring companies in core school subjects from making a profit. This wiped out billions of dollars in market value for online education companies like TAL Education or Gaotu Techedu.
“Obviously, there is great concern about policy uncertainty because it isn’t just about online education. There was also talk about data safety and now about mobile games,” stated Kenny Wen at Everbright Sun Hung Kai, wealth management strategist.
“So, the future is highly uncertain. It is difficult to give an accurate valuation of these stocks. Investors will take a wait and see approach and be relatively prudent in that sector because we don’t know what’s going to happen next.
Tencent stock closed at 446 Hong Kong Dollars on Tuesday, down 6.11%