Tencent, NetEase shares tumble as China urges video game companies to focus less on profits

The state-run Xinhua News Agency reported on Wednesday that authorities had called in companies, including industry leaders. Tencent (TCEHY) and NetEase (NTES), to discuss restrictions on underage streaming and playing video games.

During the meeting, companies were “urged to break away from the lonely goal of seeking profit or attracting players and fans,” according to the report. They were also asked to change any rules or game design elements that could be considered “addictive”.

Discussions included representatives from four government agencies: the Advertising Department of the Communist Party of China Central Committee, the National Press and Publications Administration, the Office of the Central Commission for Cyberspace Affairs, and the Ministry of Communication. Culture and Tourism, according to Xinhua.

“Companies that fail to meet the requirements will be severely punished,” the state news agency reported.

Shares of Chinese game companies fell in response to the news. Shares of NetEase closed down 5.2% in New York on Wednesday, after the state media report was released, and shares of Tencent fell 6% in Hong Kong on Thursday.

Just last week, China banned online gamblers under the age of 18 from playing on weekdays and limited their play to just three hours on most weekends, marking a significant escalation in restrictions on the huge gaming industry. country game.

The move represented a huge tightening of earlier limits set by the agency in 2019, which had already limited play to 90 minutes on weekdays and three hours on weekends for kids.

Authorities said last week that the new restrictions were put in place to prevent young people from becoming addicted to video games.

They reminded companies of the mandate on Wednesday, saying game providers should “fully and faithfully impose the deadline” on minors.

“Online gaming companies and platforms (…) should strengthen their political positions and shoulder their responsibilities,” Xinhua wrote.

He said authorities had asked companies to crack down on content promoting “false values” or “an unhealthy culture,” such as obscenity, violence and the “cult of money.”

Live gaming platforms have also been urged to step up supervision, “including banning big rewards” for underage players.

Visitors playing

Businesses heed the warning.

“We believe in healthy play and take the physical and mental health of minors very seriously,” Tencent said in a statement.

“We appreciate the advice and guidance from relevant regulators, and will work hard to be in full compliance with all rules relating to youth gaming addiction and content regulation.”

NetEase is also committed to “strictly follow the rules and instructions”.

“We will continue our efforts to provide more quality games and promote a healthy and responsible gaming environment for underage players, as we seek to create and promote a healthy gaming environment in China,” he said. in a press release.

The news comes as some critics have pointed out potential loopholes in the latest restrictions.

China’s state-owned CCTV broadcaster on Wednesday reported that some online video game stores “do not verify the age of buyers and will not deter buyers even if they know they are minors.”

Some stores even advertise that they are not part of the “drug prevention” campaign, according to CCTV.

– CNN’s Beijing office contributed to this report.


Source link