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 speaks on a phone at QQ toys in Beijing in this November 2006 file photo. [newsphoto]
"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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