China tells gaming firms to end ‘solitary’ focus on profit

Tencent, the country’s largest gaming company, dropped as much as 5.8% in Hong Kong. - AFP

BEIJING (Bloomberg): Chinese regulators summoned gaming companies including Tencent Holdings Ltd. and Netease Inc. to discuss further oversight of the industry and the need to deemphasise profits, prompting a slide in share prices.

The Publicity Department of the Communist Party of China’s Central Committee, the National Press and Publication Administration and two other agencies called the meeting to convey plans to step up supervision and start checks on illegal behaviour, according to the state-run Xinhua News Agency.

The government just last week released new regulations for the industry, including limiting the amount of time children can play video games to three hours a week.

The agencies told the companies they must enforce the new regulations and break from "the solitary focus of pursuing profit” to prevent minors from becoming addicted to games. They should also remove "obscene and violent content” and avoid "unhealthy tendencies, such as money-worship and effeminacy.”

"The authorities ordered the enterprises and platforms to tighten examination of the contents of their games,” Xinhua said.

"The platforms must also resist unfair competition to prevent excessive market concentration or even monopolies in the industry.”

Chinese gaming stocks listed in the US tumbled with Bilibili Inc sliding 5.9%. The Nasdaq Golden Dragon China Index slumped 3.3%. Tencent, the country’s largest gaming company, dropped as much as 5.8% in Hong Kong, while smaller rival Netease dived 7.7%. Netease said in a statement it will comply with anti-addiction regulations and promote more quality games for minors.

"We believe in healthy game play and take very seriously the physical and mental health of minors,” Tencent said in a statement.

"We appreciate the guidance and instruction from the relevant regulators, and will work hard to be in full compliance with all rules relating to youth game addiction and content regulation.”