Tencent’s Pony Ma Loses $ 3 Billion After State Media Calls Online Games “Spiritual Opium”

Chinese internet mogul Ma Huateng, also known as Pony Ma, lost $ 3.2 billion in a day after state media slammed online games in an unusually harsh editorial, fueling fears that its gaming giant Tencent and others are coming under scrutiny.

Hong Kong-listed shares of Tencent closed 6% lower on Tuesday, after falling 11% when the article was first published on the same day. Posted by a unit of the state-run Xinhua News Agency, it accused online games of causing problems such as drug addiction and myopia, and compared them to “spiritual opium” and “electronic drugs.” The story was later removed from the agency’s website, but remains in the print version.

“Some students spent eight hours a day playing Tencent’s “The honor of kings”According to a screenshot of the story. “No industry or sport can develop by ruining an entire generation.”

A spokesperson for Tencent said the company had not commented. Gaming giant NetEase, which saw its Hong Kong-listed shares drop nearly 16% before cutting losses by around 8%, did not respond to a request for comment. Billionaire NetEase founder William Lei Ding lost $ 2.3 billion, while Tencent’s other co-founder Zhang Zhidong saw his fortune drop by $ 1.1 billion.

Ke Yan, head of research at Singapore-based DZT Research, said the sale reflects growing investor concerns over regulators taking tough action against gaming companies.

“The wording in Xinhua’s editorial is very negative… and the market is really nervous about any potential regulatory action,” Ke said.

After the story was released, Tencent highlighted its efforts to protect minors. In an article posted through its official WeChat account, the company said it had reduced the maximum play hours for underage users on weekdays from 1.5 hours to one hour per day, prohibiting elementary students from making purchases in gambling and put more stringent measures in place to prevent minors from using adult gambling accounts. Purchases from underage users represent less than 15% of China’s mobile game industry, according to Ke of DZT.

China is also imposing severe and unexpected restrictions on other industries. For example, last week, authorities all but banned the once thriving extracurricular tutoring industry, forcing US-listed education companies, from Gaotu Techedu to New Oriental Education, to turn their tutoring businesses into organizations to non-profit. Beijing has also expanded its antitrust campaign, ordering Tencent to relinquish exclusive music rights at the end of July and pay a 500,000 yuan ($ 77,000) in fines.