Tencent slumps 5% after closer Chinese government scrutiny

China is stepping up its scrutiny of online and mobile games, as the leading government-owned newspaper blasted Tencent Holdings Ltd.’s Honour of Kings for harming children in the pursuit of profit.

The People’s Daily blasted Tencent’s most profitable smartphone title in an editorial, citing it as an example of how addictive games spread “negative energy” and have even led to deaths.

The harshly worded opinion piece came after China’s biggest messaging and games company declared it was limiting playing time for minors to an hour or two a day, and banning them outright after 9 p.m.

“Whether they entertain the masses or hurt lives, when it comes to earning money versus the potential for harm, we have to be even more wary,” the newspaper, considered the mouthpiece of the Communist Party, wrote.

Shares in the company, the biggest component of Hong Kong’s Hang Seng, slid as much as 5.1% Tuesday, its biggest intraday fall in over a year. The benchmark index fell 1.6%.

The company is working on a system to prevent juveniles from online game addiction, Li Min, producer for Honour of Kings, said in an interview posted on Tencent’s official Wechat account.

The People’s Daily also carried a commentary on curbing game addiction from Legal Evening News, which said Tencent’s measures are not enough.

-Bloomberg


South African media and internet giant Naspers was trading lower on Tuesday, down almost 3% having lost R74.60 of its share value. 

Naspers owes a large chunk of its valuation to its 33% stake in Tencent, which is worth about $114 billion, or 20% more than Naspers itself.

The group has gained 28% in 2017, primarily because of its stake in Tencent, which until now has been a stellar performer, having gained over 50% in Hong Kong.


Read: Naspers successfully prices $1 billion bond offering

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Tencent slumps 5% after closer Chinese government scrutiny