Tencent, one of the world’s largest companies, has come under fire for being too good at what they do. The tech giant, known for being the developer of WeChat, is also recognizable as a mogul in China’s lucrative mobile gaming industry. On Monday morning, People’s Daily published an article which called the company’s most popular mobile game, “Honor of Kings” (王者荣耀) a “poison” for China’s youth due to its extremely addictive nature.
Since this state media public denunciation, Tencent’s shares have plummeted an extraordinary 5.1% on the Hong Kong stock market exchange. Such a significant drop means that, in just two days, Tencent has lost $17.5 billion in market value. According to Reuters, it is estimated that Honor of Kings alone makes up 7% of Tencent’s total revenue. Taking that into consideration, it is not surprising that investors are a bit shaken by the threat of government intervention which now looms over this extremely valuable market.
Honor of Kings is the world’s most lucrative mobile game, boasting a whopping 200 million users globally. According to the People’s Daily, the game has 80 million daily users, which means that 1 in every 17 people in China could be playing the game at any given time. So, chances are, even if you haven’t played, you’ve probably seen someone in the city glued to their phone, completely engaged in the massively popular role-playing game.
The criticism from People’s Daily came even after Tencent had announced on Sunday that it would be imposing restrictions on its younger users in order to prevent them from over-indulging in the online fantasy world. This proactive effort included limiting the playing time of children under 12 years of age to only one hour a day, and restricting the amount of money younger players are allowed to spend on the gaming platform.
But, apparently, this wasn’t enough. The People’s Daily article cited examples of the ways in which the game was hazardous to the well-being of youngsters, such as instances where teenagers have suffered physical injuries due to their extreme dedication to the game. Taking these accusations into account, on Monday, Tencent announced that they would be imposing even stricter limitations on the game’s younger players. These new regulations will include limiting the playing time of 12-18 year-olds to just two hours per day, an advanced parental control platform and a requirement for real-name registration in order to play.
Additionally, on Tuesday, Tencent announced on WeChat that although their game does comply with the standards set by the Chinese government, they are willing to take on greater responsibility due to its intense popularity.
Hopefully, parents and teachers across China will be breathing a collective sigh of relief now that the country’s youngest generation will be forced to engage with something other than their phones. And, chances are, this specific condemnation won’t end up affecting Tencent all that much considering their forecasted revenue for 2017 is still $33 billion.
But this sort of intervention does not bode well for the world of online gaming. So, gaming enthusiasts, be warned. While you may be waging your own battles online, Chinese tech companies are facing a few of their own in the future.
By Emma Abrams
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