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Tencent and NetEase shares plunge after Chinese state media calls online gaming "spiritual opium"

By Kenneth Ang - on 3 Aug 2021, 2:32pm

Tencent and NetEase shares plunge after Chinese state media calls online gaming "spiritual opium"

Image: Tencent

For most of us, online gaming is sometimes much more than just a hobby. At times, it's also an escape from the daily grind, and as long as people know where to draw the line between fantasy and reality, it's fundamentally the same as every other form of recreation. 

Accordingly, branding it as "spiritual opium" certainly seems "a little rough around the edges", if you will.

However, that's what an article from one of China's state-run media outlets has chosen to brand it (as reported by Reuters), and while such brutal terminology might not affect the country's gamers per se, those words have certainly taken a toll on Tencent, NetEase, and loads of other Chinese gaming giants in the form of plunging shares. Specifically, the former two are the hardest hit among the bunch - as of this morning, their shares have dropped by more than 9% and 13% respectively which, considering how big they are in the gaming sphere, represent a pretty monstrous loss. In fact, Tencent alone has already lost more than US$60 billion in market capitalisation as a result of the article. 

Of course, it's a no-brainer to see why they would be affected. Not only is Tencent China's largest video gaming company, but the article, which discusses the growing issue of online gaming addiction among Chinese youths, further exacerbates the impact by repeatedly listing Tencent's Honor of Kings title as an example. According to the article, some Chinese gamers are so hooked on the game that they can spend upwards of eight hours a day on it, despite the numerous measures that the government has implemented to help curb online gaming addiction.

On top of the branding, the article also makes an equally brutal declaration within, saying that no single industry or sport "can be allowed to develop in a way that will destroy a generation". While the statement certainly does have some merit from an objective point of view - people should take everything in moderation, after all - it's really hard not to smell the overkill here.

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