Tencent Shuts Down Online Poker Platform amid Gaming Crackdown

Tencent holdings recently announced its plans to shut the ‘Everyday Texas Hold’Em’ video poker game which has gained popularity as a step towards complying with intensifying government regulations which are hitting China’s gaming scene. The announcement was not out of left field.

Source: Wall Street Journal

It follows reports in April that the country was not looking at poker as a productive or competitive mental sport. In fact, Beijing stated that it would soon become illegal not only to offer but also promote gambling sports over social media. As such, Tencent has complied and will close the game’s server from the 25th of September claiming that it is going to compensate the users of the game in accordance with the regulations issued by the Ministry of Culture.

Tencent Suffers in Silence

The Shenzhen based company which draws large profit from gaming is also currently facing mounting issues this year from stringent regulations and censorship from the government. That is why it had to succumb to pressure and pull one of the most popular games and have others censured. As a result, the market value of the firm saw a significant fall by about 20 billion dollars in one day during the past months because of concerns China would limit gaming after bearing down on online based games because it promoted ‘myopia’. Tencent has since covered its disapproval of Beijing’s sentiments on this matter and a spokesperson claimed the decision to close the game’s servers was actually a business adjustment and declined to add further comment on the matter.

Source: Moneycontrol

Texas Hold’Em is one of the most popular games in the firm’s online repertoire where several players use mind games and bluffing to predict the behavior of the opponents in order to win money in the pot. It is originally Texan and started during the 1900s, with several variations occurring in between. This is not the only game that Tencent has had to censure or interfere with as it had to amend a battle-royale game known as ‘Player-unknown’s Battleground’ on the basis, it deviates from socialist core values.

China’s Moralistic Crackdown

China’s latest crackdown in the gaming scene comes amid a broader type of campaign in order to clean up inappropriate content that has forced a lot of upcoming startups to shut down allegedly harmless services like ‘joke and comic’ applications.

This clean-up is a highlight of the major risks of doing business within the rather opaque regulatory system in China. The internet corporations which succeed in this environment do so because they are allowed by the ruling communist party to have a pass. As such, the socialist party’s crackdown is having a heavy toll on the gaming industry that has suffered the slowest revenue growth over the last decade and a half.

Source: Somuchpoker.com

For example, Tencent itself as one of the top grossing games publisher has seen a loss of 271 billion dollars in market value since the shares hit the record high in January. The company has oddly though been blasé about its losses from the regulatory constriction from mainland China and has taken a nationalistic stance encouraging these policies in the industry. Even though it will not admit it, Tencent’s financial health is not aligned with gaming policy from Beijing.