Tencent, the conglomerate and global leader in gaming, saw its shares plunge on Tuesday after Chinese state media branded online games “mental opium.”
The state-owned media reported that games have a negative impact on the health of minors. As a result, Tencent’s shares fell 6.1% in Hong Kong.
Tencent is still thriving due to its gaming business.
Back in May, the company reported $20.6 billion in revenue for Q1, a 25% increase year-over-year. Mobile gaming revenue made up 32% of that total.
However, China’s State Administration of Market Regulation ruled in July that Tencent failed to meet requirements on relinquishing exclusive rights. Since last year, Tencent has faced antitrust concerns over not reporting details of several investments and other anticompetitive practices.
Despite the adversity, Tencent continues to expand its offerings.
- It signed a three-year deal in April with Major League Baseball to broadcast in Asia.
- The company inked a multiyear distribution deal with Sony Music in May.
- It took a majority stake in Berlin-based game maker Yager in June.
- Last month, it acquired British gaming company Sumo Group for $1.27 billion.
Overall, Tencent invested in 62 gaming companies in the first half of the year.
