China's Tencent said 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".
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 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 limit 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 percent in early trade, wiping almost $60 billion from its market capitalisation.
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, US time.
The article later reappeared later in the day with the historically loaded term "spiritual opium" removed and other sections edited. The stock ended down 6.1 percent.
In the original article, the newspaper had singled out Honor of Kings as the most popular online game among students who, it said, played for up to eight hours a day.
"'Spiritual opium' has grown into an industry worth hundreds of billions," the newspaper said. "No industry, no sport, can be allowed to develop in a way that will destroy a generation."
Opium is a sensitive subject in China, which ceded Hong Kong island to Britain "in perpetuity" in 1842 at the end of the First Opium War, fought over Britain's export of the drug to China where addiction became widespread.
Tencent in a statement said it will introduce more measures to reduce minors' time and money spent on games, starting with Honor of Kings. It also called for an industry ban on gaming for children under 12 years old.
It comes just weeks after it introduced facial recognition technology to stop minors playing games between 10pm and 8am.
Anyone who fails the face verification - which is done after an unspecified amount of gaming time - is treated like a child, kicked offline and added to Tencent's gaming anti-addiction system.
The company did not address the article in its statement, nor did it respond to a Reuters request for comment.
The reposted Economic Information Daily article, in a shift of tone, said that authorities, game developers and families had to work together to combat child addiction to online video games, and parents had to be responsible for supervision.
Chinese regulators have since 2017 sought to limit the amount of time minors spend playing video games and companies including Tencent already have anti-addiction systems that they say cap young users' game time.
In practice, it is difficult for companies to stop children accessing games online because users can lie about their age.
But authorities have in recent months placed fresh focus on protecting child wellbeing, and said they want to further strengthen rules around online gaming and education.