Beijing attacks Tencent: "Intellectual opium" for China's youth

"No industry should benefit from destroying an entire generation." A Chinese state media attacked video game providers with fierce accusations. The stock market reacted in panic, Tencent promised changes. 

The Chinese government is continuing its campaign against the country's tech companies. The next victim is Tencent, one of the most valuable companies in the world and the largest corporation in the country. Gustav Theile Editor in business the news site Economic Information Daily, which is part of China's official Xinhua news agency, published a report in which, according to media reports, video games were initially referred to as "spiritual opium" and "electronic drugs". In the meantime, according to the Bloomberg news agency, the text has been taken offline, the drug comparison is no longer in the currently accessible version. 

"No industry and no sport should benefit from wiping out an entire generation," a scientist at a national research institution is quoted as saying. Otherwise, it is also a violent attack on Tencent. According to the report, the company controls more than half of the € 36 billion video games market. The tech giant's share price fell by almost 11 percent at times, causing the stock market value to drop by up to $ 60 billion. Later the minus went back to about 7 percent. 

Tencent then announced a number of measures to protect minors and prevent addiction. 

8 hours a day Honor of Kings 

The report cites "shocking data" on video game addiction among minors, according to a translated version of the article. According to surveys, almost two thirds of minors would often play online. A student is quoted in the translated version as saying, "Some classmates sometimes play 8 hours a day Honor of Kings," a multiplayer video game from Tencent Games that, according to the article, has more than 100 million daily active users. Another student reported a “feeling of dominance” because she successfully played “Clash of Clans”. The father complains that his children's school performance has suffered from their online addiction. The children would have skipped breakfast to save money and secretly buy new cell phones. In other cases described, children even attacked their parents with knives because of their video game addiction. "The excessive use of online games has a double negative impact on the physiology and psychology of minors," it said. The physical fitness of the children is suffering, the nearsightedness is increasing. 

The industry hires professionals who try to exploit the psychological weaknesses of the players. The companies are called upon to improve youth protection and addiction prevention. 

The entire industry is affected 

Tencent responded to the article on Tuesday. Minors should only be allowed to play one hour on weekdays and no more than two hours on weekends and on days off. In addition, children under the age of 12 should no longer be able to make in-app purchases. For the entire industry, the company believes a total ban on video games for children under 12 is possible. In the past, the Chinese government had repeatedly expressed its skepticism towards video games and introduced rules to protect children from gambling addiction. Tencent is now the most prominent victim, but the entire industry is affected. The share price of smaller competitor NetEase, which is also mentioned by name in the article, also fell significantly. Korean, Japanese and European video game providers also fell on the stock market. 

The government in Beijing has focused on a number of industries and companies in the past few weeks and months. Measures were taken, for example, against the transport service provider Didi, which went public in the USA, private education providers, Bitcoin mining and, in November, against the tech group Alibaba and its financial services provider Ant Group. The reasons for the steps were mostly with antitrust and data security concerns."