Beijing Calls Online Gaming “Opium For the Mind,” Shares of Tencent Plunge

China’s crackdown on tech companies has claimed another victim: Tencent, the owner of Riot Games and maker of Honor of Kings, the world’s top-grossing game in 2019 and 2020.

A state-owned newspaper wrote on Tuesday that gaming addiction in China was on the rise and labeled it “opium for the mind.” The article, which deleted the reference to opium later, fueled investor fears of potential regulation and sent Tencent’s shares sliding more than 10% yesterday. Tencent responded by banning all in-game purchases for minors and tightening the time limit on play for kids.

Why it matters: In recent months, the Chinese government has intensified its scrutiny of the country’s tech giants over data security and monopoly concerns. Nine of the top 10 market value losers in July are Chinese firms, per Bloomberg.

Tencent may not be a household name in the US, but its fingerprints are all over the American tech industry. Its investment stakes include...

40% of Fortnite maker Epic Games
12% of Snap
5% of Tesla
5% of Activision Blizzard
Bottom line: International investors burned by China’s regulatory bombshells have lost more than $1 trillion this year.
https://www.morningbrew.com/daily/stories/2021/08/03/beijing-calls-online-gaming-opium-mind-shares-tencent-plunge?utm_source=morning_brew