Tencent is forging partnerships with game publishers and hardware producers as competition intensifies in the Chinese game market.
On Nov 30th, Zhejiang Century Huatong, one of the largest game companies in the Chinese A-share market, announced that its sub-company Shengqu Games reached a collaboration agreement with Tencent. Shengqu Games will publish, promote and operate Tencent's games on its platform while having the right to decide the operation schedule of Tencent's games. Tencent will take a 20 percent share of the revenue from the collaboration and Shengqu will keep the rest 80 percent.
Shengqu is a publisher and operator of online games located in Shanghai. Founded in 1999 as Shanda Interactive Entertainment Limited, the game studio was later acquired by Zhejiang Century Huatong in 2017 and changed its name to Shengqu Games. Shengqu Games has operated Final Fantasy XIV and The World of Legend in mainland China and owns mobile game operation experiences for many hot IPs, including The Elder Scrolls, Fallout, and Love Live! School Idol Project. In the past, being one of the first successful Chinese game companies in the MMO era, Shengqu has always been seen as a major direct competitor to Tencent in the domestic Chinese video game market.
The Fallout Shelter Online operated by Shengqu Games
By partnering with such an experienced game operator, Tencent has the opportunity to further improve its games' operation efficiency and consolidate its large player base in the domestic market.
Apart from working with their former nemesis, Tencent is also expanding the influence of its content in the consumer electronics industry.
In October, Sword and Fairy 7, the latest game of a famous Chinese RPG series, was released on Tencent’s own START cloud gaming service. On Nov 29, TCL and Tencent launched a joint lab in Shenzhen, the first cloud gaming lab in the TV industry. Tencent will be working closely with TCL in developing wireless connection, transmission coding and decoding, end-to-end cloud collaboration, and system customization optimization to jointly tap into the potential of cloud gaming on TVs.
The joint lab launching ceremony of TCL and Tencent
TCL has been cooperating with Tencent START cloud gaming service since the beginning of 2020, exploring possibilities of large-screen cloud gaming from multiple dimensions such as device adaptation, technology upgrade, and experience optimization, and will no doubt be playing a key role in Tencent’s future marketing strategies.