Chinese media and technology giant Tencent suffered a dramatic loss of $14 billion on the Hong Kong stock exchange Tuesday after heavy-handed criticism from the Communist Party mouthpiece People’s Daily, which slammed the company’s hugely popular online game “King of Glory” as being “poison” to young people.
In a demonstration of the power of China’s state-run media and propaganda machine, the People’s Daily online edition posted its condemnation of “King of Glory” twice on Tuesday, once in the morning, then again in the afternoon. The result was a 4.1% fall in Tencent’s share price to HK$269.20 ($34.48) when the market closed, a loss in value of HK$109 billion. The loss fueled a 1.5% drop in the Hang Seng Index as a whole.
“King of Glory” (also known as “Honor of Kings” and “Strike of Kings”) is a multi-player online battle game owned by Tencent Games. It boasts more than 80 million users, according to the People’s Daily.
The newspaper criticized the game for spreading negative messages and energy, “ruining the lives” of players, particularly young people born after 2000, who account for 20% of the players.
“First, the game’s content is a twist of values and historical views. Second, young people’s minds and bodies are consumed by their indulgence in the game,” the People’s Daily wrote on its website. “From the government’s perspective, we need innovation, but we have greater needs for monitoring.”
Tencent hit back in a Weibo post quoting “King of Glory” producer Lin Min, who insisted that the game’s design fully complied with government requirements. “Just like other forms of entertainment, games can be part of our normal daily lives. They are not opium for our minds,” Lin wrote.
Aside from the war of words between Tencent and the state media, the company’s China Literature – China’s largest online and e-book publishing company – filed for an IPO on Monday in Hong Kong to raise $800 million, Reuters reported. Bank of America Merrill Lynch, Credit Suisse and Morgan Stanley are among the sponsors of the offering.
Tencent owns a 62% stake in China Literature, which is the country’s answer to Amazon’s Kindle store.