[Epoch Times on August 4, 2021](Epoch Times reporter Li Jing comprehensive report) On August 3, the Chinese Communist Party’s official media issued an article criticizing online games, triggering a heavy setback in the game sector, among which Hong Kong stocks’ game stocks generally fell, with “King of Glory” games Tencent fell more than 10%, and NetEase fell more than 11%. In addition, the share prices of game-related companies in the A-share market have also fallen rapidly.
The “Economic Information Daily” under the Xinhua News Agency of the Communist Party of China published an article on the 3rd titled “‘Spiritual Opium’ Has Grown into Hundreds of Billion Industries”, publicly criticizing online games as “mental opium” and “electronic drugs”, calling this new type. “Drugs” is advancing by leaps and bounds and has grown into a huge industry.
The article focused on Tencent’s online competitive game “Glory of the King”, claiming that the game has an average of 100 million daily active users in 2020, occupying the top spot in the domestic mobile game flow.
However, the “Economic Information Daily” subsequently deleted this article. In the evening, the article was restored, and the title was changed to “Online games have grown into hundreds of billions of industries”, and the content did not mention such words as “opium” and “electronic drugs.”
Affected by this news, the stock prices of related companies fell sharply. According to the “Daily Economic News”, the Hang Seng Technology Index fell more than 3% in early trading, the Hong Kong stock software and service sector fell by more than 7%, China Mobile Games fell by more than 20%, and Xindong Company fell by more than 12%. Bilibili fell by more than 9% at one time.
Online gaming giants Tencent and Netease are not immune. Tencent Holdings opened lower in early trading on the 3rd. As of the lunch break, it fell 10.23% to 426.4 Hong Kong dollars per share. The half-day market value evaporated by 466.5 billion Hong Kong dollars (approximately RMB 387.9 billion). The current total market value is about 4 trillion Hong Kong dollars.
NetEase fell more than 15% in early trading. As of the lunch break, it fell 11.76% to 139.6 Hong Kong dollars per share. The half-day market value evaporated by 64.3 billion Hong Kong dollars (approximately 53.4 billion yuan). The current total market value is 482.3 billion Hong Kong dollars.
The market value of Tencent and NetEase alone has shrunk by more than HK$500 billion.
In addition, in the A-share market, share prices of game-related companies such as Sanqi Mutual Entertainment, Youzu Networks, and Perfect World also fell rapidly, ranging from 2% to 6%.
According to Reuters, the actual sales revenue of China’s game market in 2020 is 278.687 billion yuan, a year-on-year increase of 20.71%. Tencent Games, which occupies half of the industry, achieved operating revenue of 156.1 billion yuan in 2020, which is 101.5 billion yuan higher than that of NetEase Games, which ranks second in the industry.
Tencent responded to the article published by the “Economic Information Daily”. Its official account “Goose Factory Blackboard News” published an article at noon on the 3rd, stating that Tencent will start the trial of “Glory of the King” and gradually introduce seven new measures to protect minors from “double reduction, double play, and triple advocacy” for all games.
The Tiger Securities Investment Research team said that the recent tightening of Internet supervision and before the policy is clear, the performance of most Internet companies has generally experienced downward adjustments. More importantly, the performance is more difficult to predict effectively as in the past. Reflected in the market, the short-term emotional impact may be greater than the actual impact. Investors are more worried that further tightening of supervision will trigger capital outflows, which in itself will increase market sentiment panic. This part of the supervision needs to be made clear.
Tencent Games’ “King of Glory” has been online since 2015 and has been a critical target for many times. On July 3, 2017, the “People’s Daily” official website issued two consecutive articles approving Tencent’s “King of Glory”. Tencent’s Hong Kong stocks fell by nearly 5% the next day, and the market value evaporated by more than 10 billion Hong Kong dollars.
The outside world has noticed that behind the CCP’s official media’s criticism of online games, it is the Chinese game market that has received the support of relevant government policies.
On July 29 this year, the China Game Industry Report for January-June 2021 was released at the China International Digital Entertainment Industry Conference (CDEC). The report shows that in the first half of 2021, Chinese game users reached 667 million, an increase of 1.38% year-on-year; the actual sales revenue of the game market was RMB 150.493 billion, an increase of 7.89% year-on-year.
In addition, the report pointed out that with the successive introduction of supportive policies from various localities (governments), the market environment is improving and the impact of competitions expands, the e-sports market still has a relatively broad room for growth. In the past six months, the actual sales revenue of the domestic e-sports market was 72.61 billion yuan, an increase of 0.17% year-on-year, and the same year-on-year growth with a slight increase. There are 489 million e-sports users, an increase of 1.13% year-on-year, and the growth rate is also slowing down.
As early as 2003, the General Administration of Sports of the Communist Party of China listed e-sports as the 99th official sports event.
On September 6, 2016, the Ministry of Education of the Communist Party of China issued the “Professional Catalogue of Higher Vocational Education (Specialty) in Regular Colleges and Universities”, which added the “e-sports sports and management” major, which belongs to the major category of education and sports. This marks the formal entry of e-sports majors into higher education in China.
Editor in charge: Li Qiong #
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