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Tencent Plunges After State Media Criticizes Online Games Once Again

Shares of Chinese web giant Tencent took another beating on Monday, after state media renewed its criticism of the gaming sector and called for stricter oversight as China’s unrelenting crackdown on its tech industry shows no sign of stopping. 

The Shenzhen-based company plunged more than 4% in Hong Kong, extending this year’s loss to 42% since peaking in February. Investors dumped Tencent and other Hong Kong-listed gaming companies such as the Hangzhou-based NetEase after the state-run China National Radio singled out the sector on late Friday for distorting history. Tencent’s shares closed 3.5% lower after recouping some losses.

“The gaming industry should increase self-discipline, and respect for national history should be the bottom line for the industry’s employees,” reads the editorial, which also calls for a stricter approval process and vows “zero tolerance” for online games that have “deviated from track.”

The article doesn’t mention Tencent or any other gaming company by name. It instead gives examples of Yue Fei, a Chinese national hero and a celebrated general in the Song dynasty who was depicted as surrendering in an unnamed mobile game. Qin Hui, a chancellor who betrayed Yue, was designed as a high-level gaming character. 

A Tencent spokesperson says the company has no comment on the matter. It has come under repeated regulatory scrutiny this year, including fines for violating the country’s anti-trust rules and being ordered to give up exclusive music rights. Earlier this month, the company’s bread-and-butter online games business faced pressure from an offshoot of the official Xinhua News Agency, which likenedthe entire industry to “spiritual opium” and “electronic drugs,” and lambasted it for ruining an entire generation.

Such harsh wording has since been removed, but a revised article criticizing online games is still online. Tencent, in the meantime, was sued in June for “inappropriate content” in its flagship Honor of Kings mobile game. In a lawsuit filed in the city, The Beijing Teenagers Law Aid And Research Center, a public-interest group, alleges that the game’s storyline tampered with historical figures and distorted traditional Chinese culture. The Tencent spokesperson says the company has no comment on the lawsuit either.

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