Massive Chinese gaming companies Tencent and NetEase saw their stocks crash more than 10 per cent as state media likened online gaming to addictive drugs.

Tencent, which owns a 40 per cent minority stake in Fortnite publisher Epic Games, scrambled to contain the fallout as an article in Economic Information Daily – affiliated with state-run news agency Xinhua – condemned its games, including the popular Honor of Kings, as “electronic drugs” and “spiritual opium”, and called for tighter regulations.

“No industry, no sport, can be allowed to develop in a way that will destroy a generation,” read the post, which has since been removed.

A screenshot from Honor of Kings. (Source: Niko Partners)

Stocks in Tencent plunged in early Hong Kong trade, before recovering later in the day. The company announced it would limit the time minors can play Honor of Kings to two hours per day on holidays and one on non-holidays, as well as barring players under 12 from in-game purchases.

Daniel Ahmad, an analyst covering the Chinese and Asian video game industries, said on Twitter that Chinese authorities have for a while been concerned about video game addiction.

China has already implemented strict anti addiction laws to curb gaming addiction among minors, which will continue to develop and play an integral part in the games industry there.

Not much else say at this point tbh.

— Daniel Ahmad (@ZhugeEX) August 3, 2021

The article has since been reinstated, though the “spiritual opium” line has been removed, which Ahmad attributes to the Chinese government’s support for the game industry and esports as a whole.