Amazon’s clash with Tencent killed its Lord Of The Rings video game after the Chinese tech giant acquired Leyou

By Josh Ye

Amazon and Tencent failed to agree to terms to keep developing a highly anticipated Lord of the Rings MMORPG. Leyou, Amazon’s partner for the game, was acquired by Tencent in December for US$1.3bil. — SCMP

A dispute between Tencent Holdings and Amazon led the American e-commerce giant to cancel its highly anticipated Lord Of The Rings video game after its partner was acquired by the Chinese social media and gaming conglomerate.

Four months after Tencent, the world’s largest video game company by revenue, shelled out HK$10.25bil (RM5.43bil) for Leyou Technologies Holdings, the latter is exiting the development of a massively multiplayer online role-playing game (MMORPG) based on the hit fantasy book and film series The Lord Of The Rings. Leyou was producing the game with Amazon, which is also producing an upcoming television show based on the series for its streaming service, and was cancelled over disputed terms with Leyou’s new owner, people familiar with the matter said.

“Following Leyou’s recent acquisition by Tencent, we have been unable to secure terms to proceed with this title at this time,” Amazon told Reuters in a statement on April 17.

Serkan Toto, chief executive of game industry consultancy Kantan Games, said that the decision to spike the game is likely costly for both companies. “It takes a lot for such scaled gaming companies to cancel projects of this size,” he said.

Tencent and Leyou declined to comment.

Amazon and Leyou, whose titles include the shooting games Warframe and Dirty Bomb, announced in 2019 that they were working on a new Lord Of The Rings game for PC and consoles. In a statement announcing the collaboration, Amazon promised to “give fans around the globe a new, immersive game experience for epic exploration of the vast world of Tolkien”.

Both companies were involved in developing the game, and Amazon was set to become the game’s global publisher while Leyou would have the publishing rights in China.

Those plans were upended by Leyou’s acquisition in December. Tencent, a gaming behemoth known for its mobile adaptations of hit global franchises such as Pokémon and Call Of Duty, outbid Japanese tech giant Sony and rival gaming company Zhejiang Century Huatong Group to buy all outstanding shares of Leyou, which went public on the Hong Kong exchange in 2011, when it was primarily a poultry company.

Leyou got into gaming when it bought Canadian developer Digital Extremes in 2014. The acquisition made Leyou one of the few Chinese firms with a portfolio of successful PC and console titles, including the free-to-play third-person shooter Warframe. Its continued success in the years that followed made it an attractive asset to many bidders.

Meanwhile, Amazon Games, the US tech giant’s in-house developer, has been struggling to make its mark in the increasingly competitive video game market. It has not put out a single big hit since the studio was founded in 2014, and it has been beset by the high-profile cancellations of titles Breakaway and Crucible and the delay of New World.

A report from Bloomberg in January pinned the division’s floundering on years of mismanagement and culture clashes between game developers and the company’s principles.

“We love the Lord Of The Rings IP, and are disappointed that we won’t be bringing this game to customers,” Amazon said in a statement to Bloomberg on Saturday.

Zheng Jintiao, co-founder of media outlet Gamer Boom, said that Leyou invested heavily in the game and repeatedly promoted it. However, he added that Tencent might have had other priorities for the game.

“Tencent’s approach has always been product-oriented,” Zheng said. “If they had any qualms about the project, they likely felt like the product wouldn’t have much of a future.” – South China Morning Post

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