What happened: Despite raising $3.8 billion in South Korea’s biggest initial public offering this year, Krafton’s shares fell sharply on its trading debut. Tencent is backing the group behind global hit PlayerUnknown’s Battlegrounds, China’s most popular game. Krafton also relies heavily on the Chinese internet group to distribute PUBG in the country. The mobile version of the 2017 game, which features players fighting to the death on a remote island, has now achieved more than 1 billion downloads.
The Jing Take: As the ripple effect of the country’s online clampdown shifts to gaming, the sector is squarely in the government’s crosshairs. In a dramatic move, online diversions have now been branded as ‘spiritual opium.’ As such, we have seen the market ramifications of these thought trajectories, as they relate to increased productivity, with many doubting the merits of gaming culture.
For now, it is unclear at what point these regulations will end. However, Tencent’s severe response — announcing new restrictions on how long minors can play and prohibiting anyone under the age of 12 from in-game spending — is striking. And that message had already been amplified by 14-year-old Olympic diving champion Quan Hongchan, who told the media that although she enjoyed playing PUBGs, she knew her limits.
When it comes to luxury, brands must carefully watch the industry’s growing rapport with esports and gaming (this month alone saw Louis Vuitton and Burberry release online games and NFTs, respectively.) However, a better solution might be to play the long game.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.