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Tencent’s Pony Ma Loses $3 Billion After State Media Calls Online Games ‘Spiritual Opium’

By News Creatives Authors , in Billionaires , at August 3, 2021

Chinese internet tycoon Ma Huateng, also known as Pony Ma, lost $3.2 billion in one day after state media lambasted online games in an unusually harsh editorial, fueling fears that his gaming giant Tencent and others could come under heightened scrutiny.

Tencent’s Hong Kong-listed shares closed 6% lower on Tuesday, after plunging as much as 11% when the article first came out the same day. Published by a unit of the official Xinhua News Agency, it blamed online games for causing problems such as addiction and myopia, and likened them to “spiritual opium” and “electronic drugs.” The story was later taken down from the agency’s website, but it remains in the print version.

“Some students spent eight hours a day playing Tencent’s ‘Honor of Kings’,” according to a screenshot of the story. “No industry or sport can develop by ruining an entire generation.”

A Tencent spokesperson said the company had no comment. Gaming giant NetEase, which saw its Hong Kong-listed shares plummet almost 16% before paring losses to close about 8% lower, didn’t respond to a request for comment. NetEase’s billionaire founder William Lei Ding lost $2.3 billion, while Tencent’s other cofounder, Zhang Zhidong, saw his fortune drop by $1.1 billion.

Ke Yan, head of research at Singapore-based DZT Research, said the sell-off reflects investors’ mounting concerns over regulators taking heavy-handed actions against gaming companies.

“The wording of the Xinhua editorial is very negative…and the market is really jittery over any potential regulatory action,” Ke said.

After the story appeared, Tencent highlighted its efforts to protect minors. In a post published via its official WeChat account, the company said it had reduced underage user’s maximum gaming hours on weekdays from 1.5 hours to one hour per day, banned elementary school students from making in-game purchases, and implemented more stringent measures to prevent minors from using the gaming accounts of adults. Purchases from underage users account for less than 15% of China’s mobile game industry, according to DZT’s Ke.

China is also imposing harsh and unexpected restrictions on other industries. For example, just last week, authorities all but banned the once burgeoning after-school tutoring industry, forcing U.S.-listed education companies from Gaotu Techedu to New Oriental Education to turn their tutoring businesses into non-profits. Beijing also widened its antitrust campaign, ordering Tencent to give up exclusive music rights in late July and pay 500,000 yuan ($77,000) in fines.


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