Why do global gaming companies love Tencent’s money?

In 2020, Tencent’s game is accelerating the pace of global sweeps. A week ago, Tencent considered buying about 20 to 25 percent of The French casual gaming company Voodoo for less than 500 million euros (about 4 billion yuan), Bloomberg reported. Voodoo is known in the industry as the “King of Small Games”, currently released more than 100 products accumulative download sacroon more than 3.7 billion copies, its “Helix Jump” Roller Splat” “Snake VS Block” are the world’s most popular.

In the June mobile app publisher download list released by Sensor Tower, Voodoo even beat Tencent (eighth) with a combined third-place finish.

Why do global gaming companies love Tencent's money?

The acquisition, Tencent is looking at Voodoo’s overseas issuance capacity, trying to fill its overseas issuance capacity through a stake.

It is interesting to note that Tencent just signed an exclusive privatization agreement with Hong Kong-listed game maker Leyou Technology in early July. Once the privatization is completed, Leyou Technologies will become a wholly owned subsidiary of Tencent.

Le Tour technology is not well-known in China, but many players in Star Wars are no strangers to this perennial top-five game, developed by its Canadian subsidiary Digital Extremes.

To put it bluntly, the core assets of Leyou technology are divided into two pieces: on the one hand, the European and American subsidiaries gathered 3A technical personnel and accumulated project experience;

In fact, since 2006, Tencent has been “hunting” overseas gaming companies.

Especially in 2012-2019, Tencent has invested in Epic Games, Activision Blizzard, Supercell, Blue Hole Studios, Sharkmob, Funcom and other well-known foreign game manufacturers. In addition, Tencent has also made investments in overseas IP providers, distributors and downstream industries such as live streaming.

There was a rumor in the domestic gaming industry that ByteDance had initially wanted to acquire several mature gaming teams, only to be talked about at home and abroad and find that these companies had either accepted Tencent’s investment or accepted external investment, so they chose to build their own game development team.

According to Tiger Sniff incomplete statistics, Tencent has launched at least 51 investment mergers and acquisitions in the past 14 years, with investment targets spread across more than 14 countries and regions on three continents, including Asia, Europe and the United States, covering four major areas of basic engine technology, game development, channel distribution and gaming community.

Why do global gaming companies love Tencent's money?

It can be said that whether the world’s mainstream game factory or the new game production/ distributor, are being put into the scope of the global sphere of influence of Tencent.

As a result, technode Insider, an overseas technology media outlet, directly describes Tencent as a “sunset empire” – “it’s like the Uk, where the sun never sets on Tencent’s gaming empire, and at any time, anywhere in the world, gamers interact with Tencent-related games.” “

Why have foreign game makers chosen Tencent?

After the changes in the situation in the U.S. and China, the U.S. began to publicly boycott Chinese companies such as Huawei and TikTok, but Tencent, which invests in companies such as Glu Mobile, Snap, Activision Blizzard and Tesla, will not face such trouble.

Technode reports that perhaps the reason for Tencent’s unique approach to international gaming, “Tencent’s acquisition of its overseas gaming business looks more like an unrelated bet than part of its strategy, and it never interferes with the day-to-day operations of the invested companies.” This may have helped Tencent avoid the attention and the possibility of facing us government scrutiny. “

In fact, the investment style of Tencent’s overseas gaming business is nothing more than six words – “small equity, no control.”

Of the 51 cases in which Tencent’s overseas gaming business has been re-opened above, most of them act as financial investors and do not interfere in the day-to-day operations of the team, even if the holding does not abuse control but is fully decentralized, so the investment companies generally praise Tencent.

Polygon, a foreign gaming medium, for example, boasted directly: “Ubisoft sees Tencent as a company that will sneak in and allow existing leaders to continue its success trajectory.” Vivendi threatens Ubisoft’s management and operational culture, and Tencent’s history of letting go of investment gives Ubisoft confidence and security. So far, partnerships and investments with Tencent have brought opportunities and prosperity. “

And Yager’s CEO Timo Ulmann almost boasted about Tencent, “We are honored to join Tencent’s partner lineup and expand our business through Tencent’s resources and extensive industry knowledge, whose names sound like a celebrity in the gaming industry.” “

Of course, it may be that Tencent offers a price that the other side cannot refuse every time.

Tencent, for example, spent $8.6 billion on an 84.3 percent stake in Supercell, the developer of “Clash of Tribals”; 369 million euros ($2.866 billion) for a 5 percent stake in Ubisoft; $2.3 billion for Fist, a wholly owned hero’s alliance developer; and Rovio, the angry birds developer, for more than $3 billion. Any one seems to have four big words on the front of the brain that read “Rich and thick”.

Why do global gaming companies love Tencent's money?

Launched on October 27, 2009, “League of Heroes” has grown into a 10-year deal with hundreds of millions of players, billions of dollars in annual revenue, and 100 million viewers in a single-season telesports.

It is not polite to say that Tencent in the game industry flashing down so many years, nothing but to convey to the world a simple truth: no gold, no game – for players, game manufacturers are applicable.

As for domestic gaming companies, in addition to not being able to refuse Tencent’s offer price, but also because joining Tencent Eco will greatly increase the chances of the game becoming a pop-up – to Tencent’s huge user volume in the country and the distribution channels, the game is not born that peak?

Therefore, Xishanju and Tencent co-operation to push “SwordMan Love”, Changyou took out the “New Tianlong Eight” and Tencent cooperation, even Shanda has chosen to laugh with Tencent, hand in hand together to do “Legendary World.”

Can Tencent games “wash white”?

Although foreign manufacturers regard Tencent as a “guest”, but the domestic is a different story: a large proportion of players will sony, Microsoft, Nintendo and even Ubisoft, EA and other game companies have faith, but always maintain a disdain and antipathy to Tencent.

More than a decade ago, Tencent’s reputation was much worse than it is now, because at that time Tencent had not yet started to buy the game company, but directly copy other people’s ideas to do “imitation”, and then in its own strong user base and the distribution channels, operating capacity of the increased holding, continue to eat the market share of the original game, and finally came first.

“QQ Hall” in the “bubble hall”, “QQ dance” in the “Dance Troupe”, QQ flying car in the “run go-kart”, “crossing the line of fire” in the “counter-terrorism elite”, no better.

Why do global gaming companies love Tencent's money?

QQ Hall is also regarded by the industry as a unfair competition for Grand.

However, Chinese pay attention to the “king and loser”. From the results-oriented point of view, you can scold Tencent will not do a good job of the game, you can blame Tencent “plagiarism”, but have to admit that it knows how to tap human nature, is a good at “mass production” burst, successful commercialization of the game company.

Second, Tencent’s acceleration of the entire game ecosystem has brought huge side effects.

Originally PC games in the domestic dominance, the player group has their own faith, but for the faith recharge is after all a minority. In layman’s terms, gold needs a certain threshold of the game, there is sufficient time between players, space communication and communication.

However, things began to change as Tencent’s game gradually took the market.

Netizens @lxr1001625 once extremely sad to repeat the tao: “When NetEase, shanda, giant and other big factories value is the head player rather than leeks, and Tencent entered, quickly lower the threshold of gold, resulting in many people later have a Tencent game value of the feeling, because no matter how much to spend can see the effect, the result is this kind of accumulation of more strategy, almost all players have been cut again.” Therefore, Tencent this set of play, aimed at the weakness of human nature comparison, and did not create a high threshold, in fact, amplify the poor root of people. “

When a game occupies the right to speak is no longer the head elite players and become “RMB players”, when a game more and more new people xiaobai by the manufacturer’s activities, the deterioration of the game experience is inevitable result, and the recharge behavior will become cheap and blind.

Tencent’s approach has also hurt other gaming companies, with each gaming team’s work having a market choice process, while Tencent has turned market choice into a “Tencent choice” – changing the life cycle of the game based on its own operational strategy, with more resources starting to invest in more profitable works.

To put it bluntly, Tencent’s gold system, capital game, and momentum, to a certain extent, led to some excellent games can not enter the public’s view and died, the competition in the game industry has become more “utilitarian” and “barbaric”.

Still, it’s a development perspective – at least Tencent’s bad image in the end-of-line era is being reshaped in the mobile game era.

“AOV” (overseas version of “Glory of the Kings”) as Tencent’s first self-developed game, the speed of global expansion can almost be described as “sweeping”. Many readers do not know that “AOV” is the only Chinese self-research Mobile game selected for the Asian Games, and the KPL team of China won the “electric gold” in the AoV project competition.

Then, Tencent’s PUBG Mobile took just one month to top the world’s 49 countries and regions download list, becoming the fastest domestic mobile game in the history of China’s Mobile game overseas gaming market.

You may wonder, in theory, Europe and the United States after decades of game factory edification, there should be better than China’s game soil and game environment, why China Mobile game in the local so “can play”?

In fact, some European and American game market although long-term by the host and PC game education, but its players mobile phone iteration speed than the Chinese market and even Southeast Asia are slower. “Phones are a communication tool for them, and when you use the iPhone 7, iPhone 8, they’re probably still using the iPhone 5 – in Brazil, a lot of people are even using flip-flop Motorola.”

Moreover, the growth rate, payment rate and user acquisition cost in overseas markets are much more optimistic than the domestic gaming market: China’s game industry report 2019 shows that the actual sales revenue of domestic independently developed games in the domestic market reached 189.51 billion yuan in 2019, up 15.3% YoY, while in overseas markets, actual sales revenue reached 11.59 billion U.S. dollars, up 21%.

So there is now a consensus in the industry: at least in the Mobile game market, if the Mobile game in China, Japan and South Korea is only second-rate in the world, then there is no Mobile game to claim to be the boss.

Based on this, last month At Tencent’s annual game launch, Qin Yalin (the head of Tencent’s interactive Tianmei studio group J1 studio) revealed in advance the news of its entry into the 3A field, “Tianmei is working with many other international game companies on a number of 3A quality games, will soon meet with you.” “

This has caused a heated debate among the domestic player community: watchers believe that Tencent has no determined environment to produce 3A at all (A lot of money, A lot of resources, A lot of time, collectively known as 3A, referring to a game with high development costs, long development cycles, high resource quality requirements), nothing but a circle of money;

On the one hand, the slowdown in the domestic game market user growth rate is an indisputable fact, “2019 China’s game industry report” shows that the size of domestic game users in 2019 reached 640 million, an increase of nearly 2.5% year-on-year. That’s 626 million (user size) in 2018, up 7.3 percent from a year earlier.

Tencent wants to maintain the high-speed growth trend of the past, speeding up the sea is the inevitable choice. And want to conquer the European and American markets, 3A game has enough say.

Why do global gaming companies love Tencent's money?

On the other hand, the 3A field is in the future.

According to Newzoo, the global market share of console games in 2019 was 32%, with mobile games and PC games accounting for 45% and 23%, respectively. Newzoo predicts that with the release of the next generation of Xbox and PlayStation consoles, revenue from the console gaming market will continue to grow at a positive compound annual growth rate (9.7 percent) and reach $61.1 billion by 2022.

Coupled with recent years, a number of official domestic policy documents have stressed that the current Chinese game companies lack of deep cultural heritage, lack of global recognition of the boutique game, Tencent in the subject to the layout of the difficult situation choose to join 3A production, both to embrace the policy but also to strengthen their own brand output, pry more domestic and foreign players, why not?

However, Tencent has always been a proxy, it can really produce a worthy domestic 3A game?

At present, the consensus of the game industry is that it is difficult to make a real 3A masterpiece by relying solely on the domestic talent pool “behind closed doors”. However, the acquisition of mature 3A production teams in Europe and the United States makes things a lot easier – of course, this is Microsoft, Sony and other host companies to strengthen the dominant tactics.

In early July, Tencent opened a game studio in California called LightSpeed LA, part of Tencent’s Photonic Studio group, which produces 3A-class games for next-generation consoles. Steve Martin, a former R-star developer who has worked on games such as GTA5, Red Dead Redemption: Redemption 2, will be the studio’s director.

In an ideal state, Tencent’s next script could be to build an overseas studio – the live 3A production process – using capital to pry the world’s top talent into the process – and continue to build a 3A masterpiece belonging to Tencent.

Objectively speaking, this is fundamentally different from Tencent’s previous financial investment in gaming big factories: tenten is creating China’s 3A soil through capital power.

However, tiger-sniffing readers , Kang Peng pessimistic view, a “follow” strategy deep in the bone marrow of the game company to become the market leader, in the case of almost no 3A talent in the case of the production of 3A games, only may continue to imitate the foreign hot IP, not to talk about innovation at all.

“Zhang Xiaolong, Yao Xiaoguang… Tencent why so many single-ride savior story, horse racing mechanism led to a serious departmental wall, results-oriented limited the long-term vision, the two together is Tencent’s game research and development department’s ability to grow slowly. “