Those fears were stoked Tuesday after Economic Information Daily — a business newspaper owned by Xinhua News Agency, which is China’s official news outlet — published a lengthy analysis that used terms such as “opium” and “electronic drug” to describe the harmful effects of gaming on children.
“It turns out ‘spiritual opium’ has grown into a multi-billion dollar industry,” the article read. “Insiders warn: watch out for the harm of online games.”
Tencent’s shares fell over 10% in Hong Kong on Tuesday, but recovered some of the losses to finish the day down 6%.
“Minors under the age of 12 (primary school students) are prohibited from in-game spending,” the company added.
It also called for an industry-wide discussion on “the feasibility of banning primary school students under the age of 12 from playing games.”
Tencent alone lost over $100 billion in market value in a matter of 48 hours as investors worried about China’s widening crackdown on the private sector.
As its shares tumbled, the Shenzhen-based company also temporarily suspended new user registrations for its WeChat messaging platform. It said the move was related to an upgrade of its security systems, in accordance with “relevant laws and regulations.”
Tencent was also hit by a regulatory order last month to scrap its plan to acquire another music streaming player, China Music Corporation. Regulators cited competition concerns, noting that Tencent has long been leading the market.
In recent months, Chinese tech giants have been caught in an unprecedented crackdown on sectors ranging from ride-hailing to education. Since February, shares of overseas-listed Chinese tech firms have lost a staggering $1.2 trillion in value, Goldman Sachs analysts said last week.
— Sasha Chua and Laura He contributed to this report.