Shares of Tencent and NetEase plunged on Tuesday after Chinese state media branded online gaming “opium” and likened it to a drug.
The article also called for further restrictions on the industry in order to prevent addiction and other negative impacts on children.
The article was deleted a few hours after publication but has since been re-published with a new headline and references to “opium” removed.
Tencent shares closed around 6 percent lower, while NetEase closed down almost 8% in Hong Kong, with both companies clawing back some earlier losses. Tencent is one of the world’s largest gaming companies responsible for high-profile games like “Honor of Kings.”
NetEase declined to comment. Tencent was not immediately available for comment.
The article, by Economic Information Daily, a Chinese state-run publication that’s affiliated to the official Xinhua newspaper, said that online gaming addiction among children is “widespread” and could negatively impact their growth.
The article said that in 2020, more than half China’s children were nearsighted and online games affects their education.
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SOURCE: NBC News; CNBC, Arjun Kharpal