China state media softens criticism of video game industry

Dialling down of rhetoric comes after shares in Tencent and other firms in sector plunge

Visitors at the Tencent Games booth during the China Digital Entertainment Expo and Conference in Shanghai on July 30. The company on Tuesday said it will introduce more measures to reduce minors' time and money spent on games. It also called for an
Visitors at the Tencent Games booth during the China Digital Entertainment Expo and Conference in Shanghai on July 30. The company on Tuesday said it will introduce more measures to reduce minors' time and money spent on games. It also called for an industry ban on gaming for children under 12 years old. PHOTO: REUTERS

Chinese state media outlets, including the Communist Party's flagship newspaper, toned down their criticisms of the video game industry yesterday after an earlier harshly worded piece triggered a plunge in the shares of Tencent Holdings and other companies in the sector.

Instead of calling video games "spiritual opium", as a Tuesday article in the Economic Information Daily had, the People's Daily published an editorial in its overseas edition that stressed the need for government, schools, families and broader society to work together to better protect children from excessive gaming. Because the People's Daily is controlled by the Communist Party's Central Committee, its positions on issues are widely seen as reflecting the views of China's most senior leaders.

While the People's Daily editorial used softer rhetoric, it nonetheless highlighted the potential adverse effects that gaming can have on children, as did other media outlets such as the Securities Daily and the China News Service.

That criticism suggests greater scrutiny of the sector is likely, though perhaps not as severe a crackdown as what Beijing had unveiled for the after-school tutoring industry last month.

"Even though the wording may seem less harsh today than it was yesterday, that does not change the fundamental theme of late - making Internet giants give up some of their profits and give more spending power to the people," said Shanghai WuSheng Investment Management Partnership managing director Fang Rui. But regulations will vary by industry and those for the gaming sector.

Shares of Tencent, China's largest social media and video game firm, were trading 4.89 per cent higher in Hong Kong at the midday break yesterday after having fallen more than 6 per cent on Tuesday. NetEase was 0.82 per cent lower at the break after having been down as much as 6.03 per cent in morning trading.

Among other media that chimed in on the issue yesterday, the Securities Daily 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, firms or parents alone for children spending long hours playing video games.

The Economic Information Daily, whose commentary sparked Tuesday's sell-off, removed the article from its website later that day. It posted it again hours later with the terms "spiritual opium" and "electronic drugs" removed. It said "spiritual opium" has grown into an industry worth hundreds of billions, adding: "No industry, no sport, can be allowed to develop in a way that will destroy a generation."

Opium is a sensitive subject in China, which ceded Hong Kong Island to Britain "in perpetuity" in 1842 at the end of the First Opium War, fought over Britain's export of the drug to China where addiction had become widespread.

Tencent, in a statement on Tuesday, said it will introduce more measures to reduce minors' time and money spent on games. It also called for an industry ban on gaming for children under 12 years old.

Beijing has since 2017 sought to limit the amount of time minors spend playing video games and companies, including Tencent, already have anti-addiction systems that they say cap young users' game time.

BLOOMBERG, REUTERS

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A version of this article appeared in the print edition of The Straits Times on August 05, 2021, with the headline China state media softens criticism of video game industry. Subscribe