Tencent tumbles 10% after Chinese media slams online gaming for being addictive, raising concern that regulators may target this sector next

NOEL CELIS/AFP via Getty ImagesTencent stock dropped 10% Tuesday, after a Chinese news outlet condemned online gaming's negative effects on children.According to China's official press agency the report referred to gaming in two ways: "Spiritual Opium" and "electronic Drugs."This has heightened investor concern about China's regulatory campaign.Subscribe to our daily newsletter 10 Things Before The Opening Bell.Tencent Holdings plunged 10% Tuesday, after a Chinese state media outlet called online gaming "spiritual opioid" and "electronic drug," raising concern that the government could target online entertainment in the future as part of its regulatory crackdown.NetEase shares fell 15% while NetEase shares fell 21% in gaming developer XD Inc and 16% in mobile-game publisher GMGE Technology Group.China's Economic Information Daily is run by Xinhua, the official state-run media agency. It states that teenage gaming addiction could be a problem for young people's education.The article was also deleted after only a few hours of publication. Tencent's flagship game Honor of Kings was reported as students playing for up to eight hours per day. According to the article, more than half of China’s children were shortsighted in 2020.According to a Reuters report, "No industry or sport can be allowed develop in a manner that will destroy a nation."The outlet called for additional measures to limit the time that children spend online gaming and to review game content regularly to ensure that they are not exposed to "improper" information.According to data, 62.5% of minor netizens play online games, and over 13% spend more than two hours per day playing on their phones, the report found.According to UBS strategists, the sector's fundamentals need to be protected as minor gaming revenues only make up a small portion of overall gaming revenue.UBS stated that the latest development "has fueled speculations that Beijing might be re-focusing online gaming after the 2018-19 tightening." This raises investor concerns about China's regulatory campaign towards the new economy space after its recent overhaul of the after school tutoring sector.China has banned children under 18 from playing video games between 10 p.m. and 8 a.m. in an effort to reduce addiction. According to Statista data, China is the largest gaming country in the world.Tencent stock closed down about 6%, despite a later announcement by the company that it would restrict the amount of time minors are allowed to play its games. The play time would be reduced from 1.5 hours to one hour on holidays and 3 hours to 2 hours for non-holidays. Initially, the new measures will only apply to its "Honor of Kings” game.Continue reading: Peter Brandt, an unknown market wizard, achieved an average annual compounded return (compound) of 58% for 27 years. This highly successful trader explains how he finds asymmetric opportunities and shares 2 rules to avoid popcorn trades'.