Shares of Tencent Holdings Ltd. and rivals plummeted Tuesday after a state-owned Chinese newspaper 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 about 12%, while those of video and gaming group Bilibili Inc. declined 11%. The falls helped drag the city’s Hang Seng Tech Index down 2.4%.
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.
“Society has come to recognize the harm caused by online gaming and it is often referred to as ‘opium for the mind’ or ‘electronic drugs,’” the newspaper said. It said gaming addiction was on the rise, affecting children’s studies and causing alienation.
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.