China to ban kids from playing games for kids

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China to ban kids from playing games for kids

encent Holdings Ltd. led a stock rout after Chinese state media criticised the'spiritual opium' of games, prompting the company to broach a ban for kids and sparking fears Beijing will set its sights next on the world's biggest gaming arena.

China's most valuable corporation joined rivals in a gaming saleoff from NetEase Inc. to Nexon Co. after an outlet was published by the Xinhua News Agency, after an aggressive analysis of their industry. The Economic Information Daily cited a student as saying some schoolmates played Tencent’s Honor of Kings — one of its most popular titles — eight hours a day and called for stricter controls over time spent. The online link to the post was deleted without explanation hours later, although the story remains in print version.

Tencent then followed with a pledge to further limit play time for minors — to be limited to just an hour during weekdays and no more than two hours during vacations and holidays. What's a step up from the restrictions imposed by China's gaming watchdog in 2019? It also plan to forbid ingame purchases for kids under 12 year-olds, starting with its signature title. The company also broached the possibility of the industry banning games altogether for children under 12 without elaborating.

Tuesday's rapid fire developments stoked fears Beijing will next train its attention in an arena that plays pivotal to the bottom line of media giants from Tencent to Apple Inc. and Activision Blizzard Inc. These come after a couple of tumultuous weeks for global investors who at one point wiped out more than $1 trillion of market value. Since July, the government has effectively frozen overseas listings in the wake of Didi Global Inc. s controversial $4.4 billion IPO and ordered a swath of non-profit companies to go offshore. Those actions demonstrate Beijing's resolve to go after state enterprises to address social inequities, control of data it deems crucial to economic stability and reduce powerful interests.

'China, in this regard, is in uncharted waters and needs to tread the path carefully, said Aidan Yao, Senior Emerging Asia Economist of AXA Investment Managers. A lot of the recent market volatility is, in my opinion, a result of investors not knowing what Beijing is up to, which inadvertently erodes confidence in investing in this market. The latter is a key risk that needs to be carefully managed.

Tencent recouped as much as 11% Tuesday before dived some of these losses to end 6% lower. Shares in Tencent backers Naspers Ltd. and Prosus NV slid, while Nexon fell alongside Nintendo Co. and Capcom co. in Tokyo. Many foreign game developers have a licensing agreement with Tencent to get their titles into China.

In Beijing's campaign to expand its giant internet business it enters its 10th month, a roller coaster ordeal that prompts nervous investors to ponder the longer-term ramifications of crackdown on firms from Jack Ma's Ant Group Co. and Alibaba Group Holding Ltd. to Tencent-backed food delivery giant Meituan and Didi. Tencent has been losing about $400 billion in market value since a January peak.

The word choice of spiritual opium is especially harsh, it would be surprising if regulators won't do anything about this, said Ke Yan, a Singapore-based analyst with DZT Research.

China's social media leader has run afoul of regulators in the past, most notably in 2018 when watchdog agencies suspended gaming addiction and temporarily clamped down on monetization licenses, walloping Tencent's main business. In the past terms likening games to narcotics have in fact been employed in Chinese media to call attention to the prevalence of gaming among youths, tracing back to the era of PC gaming in cybercafes.

Tencent has imposed other enforcement measures on playing for minors in response to limit addiction. Just last month, er infracial recognition systems were installed on certain games to prevent kids from using their parents' IDs to buy in-game items. In the fourth quarter of 2020, minors aged below 18 accounted for just 6% of the company's Chinese gaming gross earnings.

'No industry or sport should prosper by eradicating an entire generation, Tuesday's article said, citing an academic at a state-backed institution.