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Chinese state media “Games are mental opiate”… corporate stock price plummeting

In China, the recent social problem that teenagers are too engrossed in gaming has become a social problem, and regulations such as the introduction of a real-name verification system to limit the time spent playing games are being implemented. On August 3, 2021, Chinese state media released an article criticizing games as mental opiate, causing stock prices of Tencent, NetEss, and XD to plummet.

The report raises the alarm about the widespread impact of online gaming addiction among adolescents, with examples such as students playing games for eight hours a day. In addition, the harmfulness of games is increasingly widely recognized in society, and games are often equated with drugs as spiritual opium. Here, citing the view that the industry should not be developed in a generation-destroying way, the game is denounced as having a detrimental effect on youth.

The article posted online was republished hours later, with the title changed and mention of opium removed. However, following this article, the stock price of game companies plummeted. On Hong Kong steam, Tencent shares fell nearly 10% right after the article was published, eventually dropping 6% from the previous day. Netis and XD also fell 8% from the previous day, and Nexon’s stock fell 6.5% from the previous day.

In 2019, China banned children under the age of 18 from playing online games between 22:00 and 8:00 a.m. the next morning, and enacted rules that limit play time to 1.5 hours on weekdays and 3 hours on holidays. However, in a statement released after the article was published, Tencent promised to tighten game regulations and limit the play time of those under the age of 18 to one hour on weekdays and two hours on holidays.

Tencent also said it would ban children under the age of 12 from spending money on games, and urged an industry-wide discussion about the possibility of banning children under the age of 12 from playing the game itself.

An official from a market research firm pointed out that most of the revenues of Chinese game companies are made by players over the age of 18. .

The Chinese government has recently tightened regulations in various fields, not limited to games. In July 2021, it was announced that regulations on online academies were strengthened, prohibiting existing academies from listing as for-profit companies, and not accepting classes on holidays or vacations. In addition, for Chinese companies aiming to be listed overseas, if they have user data of more than 1 million users, there is also a regulation that requires them to undergo a security review by a government agency before listing. Related information can be found here.

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lswcap

Through the monthly AHC PC and HowPC magazine era, he has watched 'technology age' in online IT media such as ZDNet, electronic newspaper Internet manager, editor of Consumer Journal Ivers, TechHolic publisher, and editor of Venture Square. I am curious about this market that is still full of vitality.

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