Editor’s note: A version of this post by Liao Shumin first appeared on Yicai Global.
Tencent Holdings Ltd. [HKG: 00700] share price plunged over four percent yesterday following an article on people.cn, criticizing the internet giant’s mobile game Honour of Kings. The WeChat account of Tencent’s official website responded at top speed. The producer of the game Li Min said that recreation indeed needs to be regulated, but guidance may be better than restriction. He also added the people will not regard the game as a disaster to be criticized.
Recently, Tencent has faced some negative opinions after consecutive new peaks of its stock price. On Tuesday, the company saw a sharp plunge in its share price, and the decline continued in the afternoon. With a 4.44 percent decrease, the price dipped to HK$ 266.4 ($34) – the minimum value that day. The market value of Tencent was reduced by around HK$ 208.5 billion, compared with the value when its share price was at a new peak on June 27.
People.cn published an opinion article headlined “Is Honour of Kings entertaining the public or damaging people’s lives?”, saying thatHonour of King sis successful as a game, but it has been bringing adverse impact to society. The number of accumulated registered users of Honour of Kings is over 200 million, and its daily active users is more than 80 million. That is to say one of every seven Chinese is playing this game. Moreover, the percentage of users born after the year of 2000 is more than 20 percent.
However, two days ago, Tencent busted the strictest ever move against over-indulging in the game Honour of Kings. The measure restricts those 12 or under to a one-hour window of play each day, and imposes a two-hour daily limit for juveniles above 12 years. Post-9.00 p.m. logins will be banned; the function of pairing with the hardware device has been added, so that juveniles cannot dodge their parents’ supervision through login with multiple accounts.
“This move shows the seriousness of anti-addiction purpose to some extent, but whether the three actions will be helpful needs to be tested further,” people.cn commented.
Data shows that those under 12 only make up about 19% of total users.
How much does Honour of Kings contribute to Tencent’s revenue? In the first quarter of 2017, Tencent’s revenue from PC games grew by 24 percent year-on-year to reach RMB 14.1 billion, and that from smart mobile games totaled RMB 12.9 billion by increasing 57 percent from last year. This shows that in the first quarter of this year, the income of online games amounted to 54.49 percent in Tencent’s total revenue, including 26.03 percent from mobile games. It goes without saying that games have contributed a lot to Tencent’s revenue.
Yao Xiaoguang, vice president of Tencent and president of Timi Studio Group of Interactive Entertainment Group (IEG) of Tencent, gave a speech in Hong Kong recently, saying that, as a phenomenal game, Honour of Kings should not be understood merely from the concept of being a game, instead, it has become a new approach for social contact.
Correspondingly, the Honour of Kings also boasts the following figures:
- Users, more than 200 million, outnumbered total investors the A-shares market.
- The revenue of RMB 6 billion outperformed 3079 A-share listed companies.
- People paid to level characters can earn a monthly income of RMB 50,000.
- Live streamers can earn an annual salary of RMB 20 million.
- Daily income from the sales of skin reached RMB 150 million.
- “Father of the Honour of Kings” bought a property in Hong Kong for RMB 98 million.
- The monthly turnover in the first quarter amounted to RMB 3 billion.