Young Chinese gamers speak out on Beijing’s new rules as game company shares drop
Aug.31 (Reuters) – New Chinese rules banning people under the age of 18 from playing video games for more than three hours a week have brought down shares of Tencent Holdings Ltd (0700.HK) and other game companies, while young players took to social media to voice their outrage.
Beijing said the new rules were needed to stop growing addiction to what it once described as “spiritual opium.” The People’s Daily, the official newspaper of the ruling Communist Party, said in an article on Monday after the rules were announced that the government must be “ruthless”.
It is “indisputable” that playing online games affects the normal life of students and the physical and mental health of adolescents, according to the article. “Destroying a teenager will destroy a family.”
The young Chinese players were angry, however.
“This bunch of grandfathers and uncles who make these rules and regulations, have you ever played games? Do you understand that the best age for esports players is the teenage years?” said a comment on Weibo, similar to Twitter, in China.
“Sexual consent at 14, at 16 you can go to work but you have to be 18 to play games. It’s really a joke.”
The blow to gaming stocks has been relatively measured, with analysts saying kids in general don’t bring in much revenue to gaming companies, although they noted that the implications for the industry’s long-term growth were much more serious.
“The root of the problem here is not the immediate impact on revenue,” said Mio Kato, an analyst who posts on SmartKarma. “The problem is that this decision destroys the whole nature of addicting games at an early age.”
Shares of Tencent, the world’s largest games company by revenue, slipped 3.6% on Tuesday. The stock has lost nearly 5% since the state media article published on August 3 describing gambling as spiritual opium.
Jefferies analysts said Monday they expected an impact of around 3% on Tencent’s revenue thanks to the new rules, assuming that gambling accounts for around 60% of its total revenue.
U.S.-listed NetEase (9999.HK) fell 3.4% in overnight trading as its Hong Kong shares fell by a similar amount on Tuesday.
Krafton Inc (259960.KS), the South Korean company that collects fees for providing services for a game similar to its blockbuster “PlayerUnknown’s Battlegrounds” (PUBG) in Tencent, China, fell 3.4%.
Tokyo-listed Nexon (3659.T) and Koei Tecmo (3635.T), both of which have exposure to the Chinese market, fell 4.8% and 3.7% respectively.
Reporting by Brenda Goh; Additional reporting by Donny Kwok in Hong Kong, Joyce Lee in Seoul and Sam Nussey in Tokyo; Editing by Edwina Gibbs
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