Tencent Stock Crashes ~6% After Chinese Government Calls Gaming "Spiritual Opium"

Tencent, one of the largest tech companies in the world, crashed ~6% (after being down nearly 11% earlier in the day) after Chinese media connected to the government referred to video games as "spiritual opium" in a scathing article about youth gaming addiction. Tencent's stock crashed in response in fear of greater regulation or a total crackdown on gaming. Other gaming giants in China like Netease and CMGE also saw their stock prices fall after the news.

Unlike the West, gaming is already heavily regulated in China (as well as South Korea). As-is, minors aren't allowed to play video games between 10pm - 8am already and this rule is being enforced by facial recognition technology. One game called out in particular in the scathing report by the government-run paper "Economic Information Daily" was Honor of Kings, Tencent's flagship mobile game, which brought in over $2.4B in revenue last year.

"No industry, no sport, can be allowed to develop in a way that will destroy a generation," the newspaper said, likening online video games to "electronic drugs".

The Economic Information Daily, citing legal experts and professors, said current curbs were not able to keep up with the sector's development to prevent youth addiction, and that there should be more "mandatory means" to increase the social responsibility of video game companies.

Honor of Kings Gameplay Trailer

Further reading: Reuters Report