Shares of Tencent Holdings Ltd. and rivals plummeted Tuesday after Chinese state media criticized online gaming as “opium for the mind,” fueling investor concerns that the companies’ popular games could be swept up into a broader regulatory crackdown.
In morning trading in Hong Kong Tuesday, Tencent’s stock fell more than 10%. The Hong Kong shares of smaller peer NetEase Inc. dropped 15%, while those of video and gaming group Bilibili Inc. declined 14%.
The state-owned Economic Information Daily published a feature on Tuesday, saying excessive gaming could have ill effects on children and highlighting experts’ calls for tighter regulation.
The article cited interviewees as saying gaming platforms should be more socially responsible, rather than purely chasing profits. Regulatory penalties should be heavier, and companies should protect children by improving anti-addiction safeguards and content-review systems, experts cited by the paper suggested.
In recent months, China has intensified scrutiny of big technology companies over issues such as data security, monopolistic behavior and financial stability, sparking a steep selloff in the shares of companies like Tencent and Alibaba Group Holding Ltd. Drastic steps to curtail the after-school tutoring sector have also unnerved investors.
