Tencent Loses $60B Value After Beijing Scores Online Games

China's Tencent Holdings Ltd. said on Tuesday it would further curb minors' access to its flagship video game, hours after its shares were battered by a state media article that described online games as "spiritual opium," Brenda Goh and Samuel Shen reported for the Associated Press (AP).

Photo Insert: The Tencent building in Hong Kong

Economic Information Daily cited Tencent's "Honor of Kings" in an article in which it said minors were addicted to online games and called for more curbs on the industry. The outlet is affiliated with China's biggest state-run news agency, Xinhua.

The broadside re-ignited investor fears about state intervention in China after Beijing had already targeted the property, education and technology sectors to curb cost pressures and reassert the primacy of socialism after years of runaway market growth.

"They don’t believe anything is off limits and will react, sometimes overreact, to anything on state media that fits the tech crackdown narrative,” said Ether Yin, partner at Trivium, a Beijing-based consultancy.

China's largest social media and video game firm saw its stock tumble more than 10% in early trade, wiping almost $60 billion from its market capitalization.

The stock was on track to fall the most in a decade before trimming losses after the article vanished from the outlet's website and WeChat account on Tuesday afternoon.

The article later reappeared later in the day with the historically loaded term "spiritual opium" removed and other sections edited.

Shares in European and US gaming companies also took a hit with Activision Blizzard, maker of Call of Duty, and Electronic Arts, the company behind Sims, both down around 2.3%.

Shares in Amsterdam-listed Prosus, which holds a 29% stake in Tencent, fell more than 6%, while European online video gaming stocks Ubisoft and Embracer Group fell 2.5% and 4.7% respectively.

WEEKLY FEATURE : PAL READY TO SOAR WITH PANDEMIC