BIZCHINA / Weekly Roundup
Tencent weathers virtual clampdown
By Wang Xing (China Daily)
Updated: 2007-03-22 09:58
The Chinese government's recent efforts to tighten supervision of online
gambling and virtual money will not have any real impact on Tencent,
according to experts, as the company's games and revenue are unlikely to
be affected by the new regulations.
A girl looks at QQ toys at Tencent Holdings Limited in Shenzhen, South
China's Guangdong Province, December 21, 2006. [chinadaily.com.cn]
"I don't think Tencent's business will be significantly affected by the
new regulations, since only a very small part of the company's games and
revenue involve online gambling," said Liu Bin, chief analyst at
consulting firm BDA China.
China's four regulators launched a three-month crackdown on Internet
gambling on February 25, aiming to make the cyber environment cleaner and
safer.
A week later, 14 Chinese regulators including the People's Bank of China
released another circular against online gambling and exchanges of
virtual money with real currencies and properties, an unusual sign that
experts said showed the Chinese government's resolute stance on online
gambling and the supervision of virtual money.
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The release of the new regulations has put China's largest instant
message service provider Tencent under the spotlight after reports in the
Chinese media that it was involved in online gambling and its QQ coin
sparked debate at the end of last year.
The reports claimed that Tencent took a 10 percent cut of the stakes from
its users of some casual games that allowed them to bet with game coins.
And because the game coins could be bought with Tencent's virtual money,
QQ coins, using real money, Tencent was criticized for its involvement in
online gambling.
"There are professional online gamblers who play Tencent games, but I
think the percentage is very, very small," said Liu. "And the company's
revenue from online gambling was extremely limited."
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