Tencent Holdings looks set to put its gaming business back on track with an estimated US$1bil (RM4.17bil) in annual revenues from its new title Peacekeeper Elite, as the country’s biggest social media and gaming company continues to shake off the impact of last year’s game licensing freeze.
Peacekeeper Elite, also known as Game for Peace, is estimated to have generated US$150mil (RM622.20mil) in gross revenues in its first month of release, and could potentially bring in US$1bil (RM4.14bil) by the end of the year, according to a report by Niko Partners.
The title, a patriotic replacement for PlayerUnknown’s Battlegrounds (PUBG) Mobile in the China market, brought in an estimated US$70mil (RM290.36mil) in player spending last month, according to data from Sensor Tower. Tencent had previously been unable to get a mobile version of the PUBG title approved that would allow it to take in fees from game skins and other items.
Games revenue is forecast to show “a notable increase” in the second quarter of 2019 with much anticipated titles like Game Of Thrones: Winter Is Coming in the pipeline, while the company still awaits approvals to monetise internationally popular games including Fortnite, according to the research firm.
Tencent is also stepping up its investment in eSports with plans to stage more large scale eSports events with support from local governments. This business segment would eventually become a “more material and profitable venture” for the company as its infrastructure matures, the report said.
Growth in China’s gaming industry stalled last year amid a regulatory crackdown on Internet content and efforts to stem gaming addiction, with Chinese authorities suspending the licensing process for new games for nine months, restarting it in December.
The central government has blamed mobile gaming for contributing to myopia among the nation’s youth, while lawmakers have accused gaming companies of peddling products that are as addictive as opium.
The much-chronicled government crackdown at one point wiped out almost half of Tencent’s market value and led to the company reporting its first profit decline. Tencent’s overall videogames business, which accounts for one third of its total revenue, slipped 1% year on year to 28.5bil yuan (RM17.24bil) in the first quarter of 2019.
The company reported a 2% decline in mobile games revenue to 21.2bil yuan (RM12.83bil) due to fewer new titles being released.
While Tencent managed to retain its place as the biggest gaming company globally, its domestic peers have yet to see a full recovery. The US is forecast to take China’s crown as the world’s biggest gaming market in 2019, driven by console titles, according to a report from market research firm Newzoo earlier this week. However, China is expected to reclaim its number one spot in 2020. – South China Morning Post