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Tencent stock falls after Chinese media calls online games 'spiritual opium'

The gaming giant took a hit after the Economic Information Daily also called games "electronic drugs".

Sam Chandler

August 2, 2021 9:30 PM

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Online gaming is quite often an escape for a lot of gamers as they seek entertainment and relaxation after a stressful day. However, stress has found its way into Tencent investors as the stock has fallen following inflammatory writing from a Chinese news agency. The state-run Economic Information Daily called gaming “spiritual opium”.

Reported on by Zheping Huang of Bloomberg on August 2, 2021, Tencent’s stock fell 10% following China’s official news agency called gaming “electronic drugs” as well as the aforementioned “spiritual opium”. The effect was felt even further as NetEase and XD also experienced a sell-off as investors panicked over Beijing potentially tightening gaming restrictions.

The effects of the news agency’s article have also crossed international boarders. The Bloomberg piece notes that Japanese gaming stock has fell, such as Nexon, which dropped 8.1%.

According to the piece by the Economic Information Daily, the games industry – or any industry – cannot be allowed to develop in a manner that will “destroy a generation”. Certainly strong words that all but denounce gaming.

Whether further restrictions are placed on the video game industry in China remains to be seen, along with the effect it will have on share prices.

Today’s news of the Tencent stock fall comes just in time for a wealth of quarterly reports from some of the biggest names in gaming. Take-Two Interactive today revealed that the Q1 2022 earnings results beat expectations but the stock still fell in afterhours trading based on the conservative outlook for this fiscal year. And tomorrow, Activision Blizzard’s own reports will be released – which is bound to draw the attention of the industry.

For more video game finance news, you’re already in the right place. You can also read over the Shacknews Finance topic for recaps and breakdowns of earnings reports.

Sam Chandler

Head of Guides

Hailing from the land down under, Sam Chandler brings a bit of the southern hemisphere flair to his work. After bouncing round a few universities, securing a bachelor degree, and entering the video game industry, he's found his new family here at Shacknews as Head of Guides. There's nothing he loves more than crafting a guide that will help someone. If you need help with a guide, or notice something not quite right, you can message him on X: @SamuelChandler