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Tencent Falls as Chinese Media Calls Online Gaming "Opium for the Mind"

Published 08/03/2021, 05:37 AM
Updated 08/03/2021, 05:40 AM
© Reuters.
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By Dhirendra Tripathi

Investing.com – Tencent stock (OTC:TCEHY) slumped by more than 6% in Hong Kong trading Tuesday after a state media report calling online gaming ‘opium for the mind’ stoked fears that the gaming sector may be next in the firing line of the Chinese authorities.

At one point, Tencent was down over 10%. Xd Inc (HK:2400) also fell, the share eroding by over 8% in Hong Kong. NetEase (NASDAQ:NTES) traded almost 9% lower on Nasdaq premarket.

The selloff was triggered when the The Economic Information Daily,  an offshoot of the official news agency Xinhua, carried a report critical of the online gaming industry.

The article was taken down from the Daily's website within hours but still exists in the printed edition.

“Society has come to recognize the harm caused by online gaming and it is often referred to as ‘opium for the mind’ or ‘electronic drugs,’” the newspaper said. It said gaming addiction was spreading and harming children’s studies.

The report quoted a student as saying some schoolmates played Tencent’s Honor of Kings for as many as eight hours a day. Tencent said it would introduce stricter curbs on younger users.

Over the last few months, regulators in China have increased scrutiny of the country's tech and education giants. Steps have ranged from barring ride-hailing giant Didi (NYSE:DIDI) from the country's most popular app stores, to asking EdTech firms to go non-profit. 

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