China Cracks Down on Video Games

Shareholders of Tencent Holdings Ltd., the world's biggest video game company, panicked last week. People's Daily, the official newspaper of the Chinese Communist Party, singled out "Honour of Kings," Tencent's biggest game, for an unusually high-profile criticism.

"Poison," the paper declared of a game played by roughly one in seven Chinese. "Constantly spreading 'negative energy.'" It linked the game to recent reports in which children allegedly stole money, experienced strokes and even jumped out of a high-rise window due to "addictive" game play.

Tencent's stock fell by more than 5 percent on the news. Although it eventually recovered, the incident should be a wake-up call to investors and gamers alike. For more than a decade, China's government has sought to define and regulate internet addiction. Its willingness to target Tencent, the country's most valuable company, suggests a new and more formidable campaign is under way -- one that could transform the $100 billion gaming industry.

The idea that the internet could in some sense be addictive emerged in 1995, in a satirical paper by an American researcher. Today it's no joke: Hundreds of scientific papers are published on the subject each year. Yet defining internet addiction as a clinical disorder -- akin to, say, heroin addiction -- remains controversial in much of the world.