Tencent sheds $15.1bn after limiting game time for children

Tencent shed $15.1 billion in market value on Tuesday after the Chinese technology group started limiting the time children spend on its number one game.

Honour of Kings is the top-grossing mobile game, generating revenues of about 6 billion yuan (€780 million) for Tencent in the first quarter of this year, according to estimates by analysts, who say more than 50 million people play the game daily.

The time limits follow criticism from authorities and the public that the hit game is too addictive – and have raised fears among investors that the company is in Beijing’s sights.

Two weeks ago a 17-year-old boy in Hangzhou suffered a stroke after playing nonstop for 40 hours. Last week state media reported a 13-year-old boy in Hangzhou had broken his legs jumping from a third-floor window after his parents stopped him from playing.

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Under-12s are now limited to an hour of Honour of Kings a day and cannot play after 9pm, according to the post, while those between 12 and 18 are limited to two hours a day.

A post on Tencent’s official social media account on Tuesday described its new rules as the “most serious anti-addiction measures in history”.

The restrictions come as investors wonder whether a series of high-profile editorials accusing the company of lacking social responsibility signal official displeasure with the internet group and the possibility of direct intervention from Beijing.

China's ministry of culture in May introduced rules requiring games developers to "set up limits" on the duration that minors can play. More than half of Honour of Kings players are under 24, with a quarter under 19, according to Jiguang, the Chinese mobile data company.

The Tencent action also points to rising political risk faced by China's technology groups - something very familiar to Silicon Valley companies that have been banned or otherwise restricted in China.

Tencent generated 26 per cent of its revenue from mobile games in the first quarter of the year, almost half of which was accounted for by Honour of Kings, according to analysts’ estimates.

The company's shares closed down 4.13 per cent at HK$269.20 in Hong Kong on Tuesday, their biggest fall in 23 months. – Copyright The Financial Times Limited 2017