China questions “addictiveness” of top Tencent game
Tencent is the king of China’s lucrative mobile gaming market, but even kings can come under fire. The People’s Daily, a leading government-owned paper that is widely considered a mouthpiece of the country’s Communist Party, published an editorial that criticizes Tencent’s most profitable smartphone title, Honour of Kings. The editorial questioned whether the company was guilty of harming children in the pursuit of profit, and used it as an example of how games can become addictive, spread “negative energy”, and have even led to deaths.
Tencent’s share price is up by an incredible 42% so far this year
SOURCE: Yahoo Finance
Honour of Kings is a self-developed title that is expected to account for more than half of Tencent’s total gaming revenue this year. It is a constant chart-topper on Apple and Google app charts, and it seems as though this popularity has caused question at The People’s Daily over motivations behind the game. The editorial said: “whether they entertain the masses or hurt lives, when it comes to earning money versus the potential for harm, we have to be even more wary.”
Tencent has over a billion active users, making it one of China’s largest corporations, and a market leader in social media and entertainment. This success comes along with scrutiny from the central government, the media and researchers of which have been critical of computer games since the days of internet cafes. Back then, fears were stoked by reports of deaths after “marathon” gaming sessions.
Despite The People’s Daily carrying content from Legal Evening News, which opined that Tencent hasn’t done enough to curb gaming addiction, the market has shown no signs of worry. On the one hand, Tencent’s user base protects it from some of the criticism, and on the other, the company has plenty of power to make further concessions without damaging its business.
To the former point, Marie Sun, an analyst with Morningstar Investment Services, said: “The demand is there and people will continue to play Tencent’s video games, so I don’t think the impact will be significant. Honour of Kings has a diversified player base, not only primary or middle school students. There are a lot of older players who will continue playing. And even players who are of a younger age will figure out ways to keep playing the games.”
To the latter point, it is worth noting that Tencent has committed itself to protecting “juveniles from addiction”. In an interview posted to its official WeChat account, the game’s producer Li Min said that people aged 12 and below will be limited to playing an hour a day and banned from the game after 9pm. Those aged 13 to 18 will be limited to 2 hours daily.
Dominion holds Tencent in its Global Trends Ecommerce Fund.
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