Tencent to Further Control Its Games After State Media Attack

Chinese tech corporation Tencent announced that it’s going to “curb” the time children play its video games after state-run media called gaming “spiritual opium” and “electronic drugs”.

The article was published in Economic Information Daily, a publication controlled by the Chinese Communist Party (CCP). Although the original article never mentions Tencent by name, it does single out Honor of Kings, one of the company’s most popular and highest-earning games.

Because of this move, Tencent lost $60 billion (about 11%) of its market shares as investors fled.

Crackdown

Over the past year, the Chinese government has been cracking down on big tech corporations to bring them under further control of the Chinese Communist Party (CCP). Tencent is the latest target of China’s regulator crackdowns and is preceded by the e-commerce company, Alibaba, which was sidelined with a record-breaking $2.8 billion fine.

@thespybrief Interesting points about China’s crackdown on some areas of big tech. Tencent crackdown will hit US gamers hard. https://t.co/h0Z7ueOXVf

— Stacey Zinke-McKee (@StacezMcKee) August 4, 2021

In terms of sheer revenue, Tencent is the world’s largest video game business. In 2020, a third of the company’s total revenue came from its online games division. With this new scrutiny from the Chinese government, Tencent’s growth in the gaming industry has been slowed and forced change is giving rivals a strategic opening.

Restricting Game Time

In a statement published on the company’s official WeChat, Tencent announced the new security measures.

The company announced that it will ban gamers under the age of 12 from spending money on its games and limit the playtime for that age range even more.

Currently, underaged gamers can play Tencent games for 1.5 hours on normal days and three hours on holidays. The new rules would restrict the time down to one hour on normal days and two hours on holidays.

Tencent also said in the statement that it will boost its verification system for player identities and upgrade its “midnight patrol” program which investigates suspicious accounts and hammers down on cheats.

Back in mid-July, Tencent announced new plans to use facial recognition technology to find out if kids are playing outside of allotted hours.

Conflict of Interest

The issue with CCP pressuring Tencent to essentially police its players is that there’s a conflict of interest going on.

Going by what the Chinese government has been doing to tech companies this past year, the CCP wants more and more control over the tech industry but at a great cost to the growth of these companies.

Activision Blizzard, which has a lot of exposure in the Chinese market, went down 3.8% in market value after this news broke and EA went down 2.8%. That’s millions lost.

As much as I hate the "video games are Satan and will make your children become arsonists" shtick, tencent games literally are just virtual crack. Every league player has deleted the game atleast like 10 times yet it always comes back like a curse

— Aidan (@vagrantaidan) August 3, 2021

If Tencent’s standing in the international gaming market is further undermined, then that would mean other gaming companies are going to look elsewhere for better deals. Developers will refuse to partner with Tencent if it means getting harassed by the CCP.

Since the Economic Information Daily article was released, Hu Xijin, who is the editor of another state-controlled media source called Global Times, said on his WeChat account that the piece was “over-[interpreted]”.

Either way, the damage has been done and Tencent is moving on with new restrictions. It’s hard to say what that means for foreign fans, but China does have a history of censoring games.

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