Game Companies Crash on Asian Stocks After Beijing Criticism

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The Japanese and Chinese makers of computer games fell hard on the stock exchanges in Tokyo and Hong Kong on Tuesday.

 

The price drops followed reports in Chinese state media describing online gaming as “spiritual opium” and raising concerns about the amount of time youth spend playing games. As a result, investors now fear that Beijing will take stricter measures against the sector.

Tencent plunged more than 7 percent in Hong Kong. The sizeable Chinese technology group owns, among other things, game developer Riot Games, the maker of the popular game League of Legends. The Chinese state media repeatedly cited the online game “Honor of Kings” by Tencent, which is popular among students. Chinese peers such as NetEase and Bilibili lost 7 and 4 percent, respectively.

In Tokyo, the Japanese maker of online games Nexon plunged more than 6 percent. Other Japanese computer game producers were also under pressure. Konami Holdings, DeNA, Sony and Nintendo lost more than 3 percent. Japan’s main index, the Nikkei 225, closed 0.5 percent lower at 27,641.83 points due to losses in the gaming sector. Concerns about the continuing rise in the number of corona infections in Japan also weighed down the mood on the stock market.

The Hang Seng index in Hong Kong was down 0.5 percent in the meantime, and the stock market in Shanghai lost 0.4 percent. The All Ordinaries in Sydney fell 0.4 percent after the Australian central bank decided to leave interest rates unchanged at 0.1 percent, as expected. On the other hand, the South Korean Kospi kept its head above water with a plus of 0.3 percent.

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