Tencent Holdings (HKG:$0700), the creator of the globe’s most popular role-playing mobile game, took a massive nosedive in Hong Kong trading, after People’s Daily wrote that its Honor of Kings game is a “drug” that’s harming teenagers. To top it off, the newspaper also described the game as “poison”.
After People’s Daily published the commentary on the game, Tencent shares dropped as much as 5.1% on the Hong Kong exchange. This means that Tencent lost HK$136 billion, or US$17.5 billion, in market value.
“Investors are quite concerned about Tencent’s profitability, given a large part of its revenue comes from the game,” explained Wei Wei, a trader Huaxi Securities. According to CNG, Honour of Kings brought in more than 5.5 billion yuan, or US$809 million, in Q1 revenue. Wei added, “the surveillance from the government on the game industry will very probably be intensified going forward as we hear the voice from the People’s Daily in this event.”
The role playing game is based on historical Chinese figures and has more than 200 million players, thus making it the world’s most popular role-playing mobile game. The game’s popularity is one of the main reasons as to why parents and teachers are complaining that children are too addicted. According to People’s Daily, the game has more than 80 million daily active users, which means that one in every 17 Chinese person is playing Honor of Kings at any time.
There have been a few tragic instances of overindulgence in the game, such as a 13-year old who jumped off a building after being reprimanded for playing the game, and a 17-year old who almost died of cerebral infarction after playing the game for 40 hours non-stop.
On Tuesday, Tencent announced that the design of the game adheres to Chinese government rules, and that it will take on its social responsibility, since the game has already become a nationwide success. Tencent has already made a number of changes to the game including a daily time limit of one hour for players under the age of twelve as well as banning them from logging into the game after 9 pm. Additionally, the company stated that teenagers between the ages of 12 and 18 will only be allowed two hours of daily play time. Tencent also stated that it would upgrade a parental control platform so it is easier for parents to monitor their children’s gaming account activities.
According to NewZoo, a research firm, China is the world’s largest gaming market by revenue, and it is forecast to make up nearly a quarter of global game sales in 2017.
Featured Image: twitter
