China state media tones down criticism of video gaming

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- Chinese State Media, including the Communist Party flagship newspaper, toned down their criticisms of the video gaming industry on Wednesday after a harshly worded piece had triggered a plunge in shares of Tencent Holdings Ltd. and other companies in the sector a day earlier.

Because the People's Daily is governed by the Central Committee of the Communist Party, its positions on topics are widely seen as reflecting the views of China's top leaders.

However, while the People's Daily editorial used much softer rhetoric, it nevertheless highlighted the potential adverse effects gaming can have on children, as did other outlets such as the Securities Daily and the China News Service. That criticism suggests a greater scrutiny of the sector is likely, though perhaps not as severe a crackdown as what Beijing unveiled for the country's after-school tutoring industry last month.

'Even though the wording appears less harsh today than it was yesterday, that doesn't change the fundamental theme of late for making Internet giants give up some of their profits and to give more spending power to the people. But regulations will differ by industry and those for the gaming sector won't be as brutal as those in education, Fang said.

Tencent's stock was trading in Hong Kong at mid-day price after falling more than 6% from Tuesday when it was 4.89% higher on Tuesday. NetEase Inc. was 0.82% lower at the break after having been down as much as 6.03% in morning trading.

Among other media that quoted the issue Wednesday said on its front page that pushing for healthy development of the industry was a pressing matter and called preventing video game addiction among minors 'the bottom line. China News Service said late on Tuesday that it was immoral to blame schools, companies or parents alone for children spending long hours playing video games.

Even the Economic Information Daily took steps to soften its wording. The newspaper commentary that sparked Tuesday's sell-off was removed from its website Tuesday afternoon, only to reappear hours later with the words spiritual opium' and 'electronic drugs' removed from the article.