Tencent will now impose restrictions on minors that play their flagship game, "Honor of Kings." Some investors are now worried that the Chinese government may extend its crackdown on the gaming industry.
Tencent to Limit Minors' Gaming Time
According to Economic Information Daily, the Chinese government is worried about the effects of gaming on children, describing it as an "electronic drug" and a "spiritual opium."
The post mentioned the company's popular game "Honor of Kings" as one of the video games that minors are currently addicted to.
The Chinese government cited the harmful effects of online gaming as the reason behind the crackdown on the gaming industry.
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"Honor of Kings" is a popular multiplayer online game developed and published by the company's subsidiary, TiMi Studio Group. The company is also known for developing and publishing "Call of Duty: Mobile and Pokemon Unite."
As of last year, the game has more than 100 million registered players, but the game's success was not smooth sailing.
In June, the gaming company faced a lawsuit after it was accused of including inappropriate content in "Honor of Kings" because there are characters with low-cut clothes, according to Engadget.
After the article came out on Aug. 3, the gaming company's shares fell 10% in Hong Kong, but it recovered to 6% before the day ended.
On Aug. 4, the stock rebounded 4.7% after Economic Information Daily edited the article and removed the terms "electronic drug" and "spiritual opium."
The gaming company released a statement saying that the new restrictions would limit the ability for minors to play the video game "Honor of Kings" to 1 hour a day on weekdays and 2 hours a day on weekends. Meanwhile, children who are under 12 are banned from playing the game.
Several gaming companies are currently discussing whether or not children under the age of 12 should be banned from playing video games at all, according to CNA.
The Chinese government has been fighting the growing trend of gaming addiction among minors for years. In 2019, the government announced that gamers under 18 are banned from playing video games between 10:00 p.m. and 8:00 a.m. On weekdays, minors can play for 2 hours while playing for up to three hours on weekends.
The restrictions that the company announced are tighter than that of the government. In July, Tencent introduced face recognition to prevent minors from playing games for hours.
Affecting the Tech Stocks
The state media's attack on the gaming industry came after tech stocks suffered a sell-off that had resulted in the loss of billions of dollars in market value, according to Time.
Last week, the company lost more than $100 billion in market value in just 48 hours after investors pulled out due to China's crackdown on private sectors.
Due to its issues with its shares, the gaming company suspended new user registrations for its WeChat messaging platform, adding that the move was linked to an upgrade of its security systems to comply with the laws and regulations.
In July, Tencent was affected by a regulatory order that forced the company to cancel its plan of buying China Music Corporation.
The regulation cited competition concerns and noted that the company has long led the market, affecting smaller businesses and startups.
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Written by Sophie Webster