Mon­ster rug-pulling

Financial Mail - - DIAMONDS & DOGS -

When you’re stand­ing at the foot of a sky­scraper strain­ing your neck to look up­ward and you spot a grand pi­ano emerg­ing from a win­dow on the 51st floor, it takes a cer­tain mind­set to re­main fo­cused on the pos­i­tives.

Share­hold­ers in Ten­cent find them­selves in this po­si­tion, when only last Christ­mas they were el­bow­ing each other out of the way in the rush to the yacht shop, de­ter­mined to or­der a large one with all the toys and not to stint on the gold trim­mings.

Since then their baby has been in free fall, largely due to the Chi­nese govern­ment’s de­ci­sion to kick off a reg­u­la­tory clam­p­down on what had pre­vi­ously been a thriv­ing gam­ing in­dus­try. This in­ter­ven­tion came from se­nior politi­cians, who were once no­tably de­scribed as a “group of ap­palling old wax­works” by no less a diplo­mat than Prince Charles. It has cre­ated a bot­tle­neck of thou­sands of games await­ing reg­u­la­tory ap­proval. In the in­terim users can play the games but their cre­ators are un­able to mon­e­tise them.

The prob­lem fac­ing any large com­pany in China, but par­tic­u­larly one such as Ten­cent with over a bil­lion users on its Wechat mes­sag­ing plat­form, is that it needs to keep Bei­jing happy, oth­er­wise the rug could be pulled out from be­neath it at dizzy­ing speed. Ten­cent had to can its much­her­alded launch of Mon­ster Hunter: World a few days af­ter it reached the pub­lic, af­ter crit­i­cism in state-backed me­dia and of­fi­cial con­cerns about the so­cial im­pact of gam­ing.

This may have cre­ated a mighty buy­ing op­por­tu­nity, but it will take nerve to pick the bot­tom.

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