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Tencent’s next level up: fewer big foreign franchise games, more in-house

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2 months ago

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In a sea change at China’s Tencent (0700.HK), opens new tab, an easy-to-play game of cute characters tackling obstacle courses has taken precedence over developing a big-budget sophisticated foreign franchise for smartphones.

Since late last year, the world’s largest video games company has, according to sources, redeployed hundreds of people from the team developing “Assassin’s Creed Jade” for mobile – a multi-year project with France’s Ubisoft (UBIP.PA)

They are now working on recently launched “DreamStar” – Tencent’s answer to rival NetEase’s (9999.HK), hit “Eggy Party” and the company’s most high-profile attempt to date at the so-called party game genre which offers simple gameplay, minigames and encourages players to hang out and chat.

As a result, “Assassin’s Creed Jade” – an action-adventure game set in ancient China that has been under development for mobile for at least four years – will likely be released in 2025 instead of this year, according to three sources familiar with the matter. They were not authorised to speak to media and declined to be identified.

The redeployment of resources highlights the trends forcing a strategic pivot at Tencent. Firstly, developing big-name Western franchises for mobile phones tends to yield thin margins.

At the same time, rivals have had breakout hits with ostensibly niche products that offer new takes on gaming such as as NetEase’s “Eggy Party” and miHoYo’s anime-style fantasy game “Genshin Impact”. Moreover, the games were developed in-house so their profits are all their own.

Tencent had, for years, great success by developing for smartphones international hits like Activision Blizzard’s shooter game “Call of Duty” and the battle royale game “PUBG” by South Korea’s Krafton (259960.KS).

But such franchise games – called IP (intellectual property) games – are costly to make. Royalty fees of 15% to 20% of sales are typical, Apple’s (AAPL.O), opens new tab App Store takes a 30% cut while marketing and user acquisition expenses can cost another 30% to 40%, the sources said.

After a string of IP game setbacks, Tencent plans to be more selective. “We’re focusing on fewer bigger budget games. Typically, we’re seeking to make the biggest bets around games that either iterate on a successful IP … or games that are iterating around proven gameplay success within a niche and taking those to a more mass market,” Tencent Chief Strategy Officer James Mitchell told an earnings call on Wednesday.

Tencent is now also pushing for royalty fees to fall to under 10% of sales in some negotiations, according to one person with direct knowledge of the matter. “That would have been almost unthinkable just a few years ago. Tencent used to be far more generous,” the person said.

Tencent declined to comment on details of its strategic shift.

SETBACKS AND BAMBOO SHOOTS

On Wednesday, Tencent reported a slight decline in fourth-quarter gaming sales and also flagged that overall gaming revenue this quarter would be soft compared with the same period last year when gaming sales surged as pandemic restrictions were lifted.

Pony Ma, Tencent’s founder and chief executive, has been blunt that the company’s video game division – which last year generated 180 billion yuan ($25 billion) in sales or around 30%of overall revenue – needs to do better.
Competitors have continued to create new products, “leaving us feeling we have achieved nothing,” he told a stadium of employees in Shenzhen at the company’s annual meeting in January, according to a separate source with direct knowledge of the event.

That month, Tencent also launched its “Spring Bamboo Shoots Project”, aiming to incubate in-house games with novel gameplay and offering budgets of up to 300 million yuan ($42 million) per game. While that is much less than budgets of 1 billion yuan for a major franchise, the initiative signals Tencent is willing to take more risks on non-conventional game design, the sources said.

Some major setbacks have only increased the sense of urgency for change.

Last year, Electronic Arts (EA.O),  discontinued “Apex Legends Mobile”, a game developed by Tencent, with executives at the U.S. firm saying it had fallen short of expected quality.

In December, Tencent axed development of a mobile game based on the “Nier” franchise from Japan’s Square Enix (9684.T), in part because the Chinese firm struggled to find a compelling monetisation model given its expensive development costs and franchise rights, sources have said.

“Mobile games studios have learned that IP is not the magic bullet for user acquisition it once was,” says Serkan Toto, founder of game industry consultancy Kantan Games.

Tencent has also seen a key in-house game bomb. “Undawn”, a zombie apocalypse shooting game that Hollywood star Will Smith was hired to endorse, flopped spectacularly despite having a budget of close to 1 billion yuan with more than 300 developers, according to two of the sources.

Last month, one year since its launch, “Undawn” brought in revenue of just $287,000, according to research firm Appmagic.

Western companies have also started to shift away from outsourcing mobile game development to Chinese companies like Tencent. Microsoft’s (MSFT.O), Activision Blizzard, for example, has just launched “Call of Duty Warzone Mobile” which will compete directly with Tencent’s “Call of Duty Mobile”.

Adding salt to the wound, Tencent’s top two games saw revenue slide during the week-long Lunar New Year holidays in February. “Honor of Kings” and “PUBG Mobile”, which are nine and seven years old respectively, suffered 7% and 30% drops compared to the holiday period last year, according to one of the sources who was briefed on the matter.

Source: Reuters

 

The post Tencent’s next level up: fewer big foreign franchise games, more in-house appeared first on European Gaming Industry News.

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George Miller (Gyorgy Molnar) started his career in content marketing and has started working as an Editor/Content Manager for our company in 2016. George has acquired many experiences when it comes to interviews and newsworthy content becoming Head of Content in 2017. He is responsible for the news being shared on multiple websites that are part of the European Gaming Media Network.

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Skyesports Championship 2024: Counter-Strike 2 unveiled with $200,000 Prize Pool, Global Teams, and LAN in India.

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May 20, 2024

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Skyesports, a premier global IP builder for gaming and esports, has announced the return of its longest-running esports IP, the Skyesports Championship, for its sixth edition in 2024. The Counter-Strike 2 esports tournament in the Skyesports Championship 2024 will feature an impressive prize pool of $200,000.

Teams from around the world will converge in India for an intense on-ground event to compete for the prestigious title. The Skyesports Championship 2024: Counter-Strike 2 Main Event is set to happen from July 23 to 28 in India with eight teams competing for the title. Five of these will be directly invited while two will secure their slots through the Europe and India Qualifiers, respectively. The final slot is reserved for the champions of the previous Skyesports Counter-Strike 2 tournament, the Skyesports Masters 2024.

The list of teams is as follows:
● Aurora Gaming: Serbia (Skyesports Masters 2024 champions)
● Mongolz: Mongolia
● BetBoom: Russia
● Eternal Fire: Turkey
● Furia Esports: Brazil
● TBD (5th invited team will be announced at a later date)
● EU Qualifier Champion: TBD
● India Qualifier Champion: TBD

Commenting on the Skyesports Championship 2024 Counter-Strike 2, Shiva Nandy, Founder and CEO, Skyesports, said, “The Skyesports Championship has been our premium IP which was founded in 2018 as a regional esports tournament in Chennai. Now, after five continuous editions, the tournament is back for its sixth year and is bigger than ever featuring the top teams from around the world in the Counter-Strike 2 esports tournament. Due to unfortunate circumstances, we couldn’t host the Skyesports Masters as a LAN in India. This time, however,we are thrilled to bring some of the world’s most distinguished Counter-Strike 2 teams to the Skyesports Championship 2024 Main Event.

Details for the India and Europe Qualifiers will be announced soon. The Skyesports Championship 2024 is the third tournament in the Skyesports $1 million Counter-Strike 2 esports roadmap. Earlier this year, Skyesports successfully hosted the Skyesports Grand Slam in Pune, India, and the Skyesports Masters.

Furthermore, the Skyesports Championship 2024 is a multi-game esports IP. Besides the Counter-Strike 2 tournament, the IP will feature several other gaming titles catering to different gaming communities. These will be announced at a later date.

 

The post Skyesports Championship 2024: Counter-Strike 2 unveiled with $200,000 Prize Pool, Global Teams, and LAN in India. appeared first on European Gaming Industry News.

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Exclusive Live Stream with Conor McGregor

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5 hours ago

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May 20, 2024

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Today is Duelbits’ exclusive inaugural live stream with The Notorious!

The stream will take place at 18:00 UTC and you will be able to join live on mcgregorlive.io

We would like to start off by inviting you to visit duelbits.com to register and start your rewards journey.

Make sure to opt-in for the Conor McGregor 30 day tournament with a grand $150,000 Prize Pool. Wager $100 or more and get ready for cash giveaways given out by The Notorious himself, during this live stream.

This is an opportunity you would not want to miss! The Notorious will be right here waiting to see if you’ve got what it takes to make it to the top of the leaderboard. Beat the best to be the best!

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In gaming culture, phones are replacing computers: “Charge your dopamine for the whole day in 5 minutes”

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5 hours ago

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May 20, 2024

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It is common to think that gaming culture and its best experiences are only associated with computers and consoles. However, the gaming environment has changed significantly over the past few years. Once considered quite niche, mobile devices have now become the dominant force in gaming. Games on smartphones now account for more than half (according to Statista, 51%) of the global gaming market revenue.

According to one of Lithuania’s most famous gaming community members and the country’s most popular streamer, Karolis Jankauskas (“LTU Republic”), whose broadcasts are followed by more than 130,000 followers on the “Twitch” channel, we are living in a time of transformation.

User engagement and the number of game downloads illustrate that gaming culture is rapidly migrating to phones. Do you think it is starting to catch up with traditional gaming among true enthusiasts?

In the Baltics, events for games with mobile devices are just beginning to be organized, but the number of interested participants and their level of engagement is rapidly growing. Observing this activity, we can assume that gaming culture on phones can not only match but in some cases even surpass the traditional one.

We used to have many various popular consoles and other devices — from “GameBoy” to “PSP.” Now, the experiences they created are also available on phones. Does gaming on a smartphone match the quality of gaming on consoles? How is the gaming community reacting to these technological changes?

Comparing mobile games and gaming on consoles or computers is quite difficult. I would say it’s like comparing a car to a motorcycle. Both move, but one offers more entertainment, excitement, and emotional experiences, while the other offers more practicality.

A similar situation exists with gaming devices. You could say that smartphones have worse graphics or a more superficial gameplay experience, but their simplicity and pace open up a completely different gaming experience. Additionally, they are accessible anywhere and anytime. You don’t have to play only at home.

Currently, true gamers who play on consoles or computers don’t yet consider themselves in the same category as mobile device players. However, I think this attitude will change over time.

At the end of May, you invite your community to meet at the “Brawl Stars” mobile game tournament “Gaming tournament by Samsung Galaxy S24 Ultra.” Is it true that this is a gaming phenomenon? It is already estimated that “Brawl Stars”

downloads have exceeded 500 million. What is the secret of its popularity? How does this mobile game already have its own e-sports team today?

“Brawl Stars” stands out with its brilliantly designed combination. The game is extremely simple, and its concept is very straightforward. Defeat your opponent, and you will be the best. And the matches are super fast. You can play 3-5 matches in 5 minutes and charge your dopamine for the whole day. This is probably the main secret of the game’s success. Plus, there are various game accessories and special events that are very engaging.

Additionally, these are the reasons why this mobile game has its own e-sports team. It is competitive and easily understandable to a wide audience.

What will make the upcoming tournament of this game different from others?

For the gaming community, this “Gaming tournament by Samsung Galaxy S24 Ultra” is relevant because it gives us an impression of how many people are engaged in gaming with smart devices. “Brawl Stars” players have a unique opportunity to test themselves against the best players. Participants are also motivated by the impressive prize—a “Samsung Galaxy S24 Ultra”.

In the qualifications and selections, players will play in teams of two, and in the finals, the teams will be changed—the players who make it will be assigned one of the Lithuania’s famous content creators participating in the event. This should add a lot of intrigue and excitement, as it will show how well the best players can communicate with content creators who may not be as good in the game as they are.

More and more gaming-oriented phones are being introduced to the market. For example, the new “Samsung Galaxy S24 Ultra”. How do they help the culture of gaming on phones grow? Can a phone even influence game results?

Just like athletes or racers need the best equipment or gear, a powerful phone gives a player an advantage. The fewer technical issues you have in the game, the faster you can progress.

Meet the most famous gamers

All gaming enthusiasts and professionals will have the opportunity to experience the best gaming moments on May 24-26 in Vilnius at the largest popular culture event in the Baltic States, “Comic Con Baltics powered by Samsung Galaxy S24 Ultra.”

The “Gaming tournament by Samsung Galaxy S24 Ultra” will take place at the impressive “Galaxy AI” booth. Here, visitors will also meet K. Jankauskas (“LTU Republic”), Simas Anužis (“Svarbeuse dariti”), Edvisss, and other famous players in the Baltics. There will be an opportunity to get up close with the most advanced “Samsung” smart devices, discover new opportunities that innovative “Galaxy AI” artificial intelligence features open up for gaming.

At the beginning of this year, “Samsung” was the first to offer its users a smartphone with artificial intelligence features. These change many ways of using and controlling the phone, as well as the habits users have adopted until now. At the event, you will have the opportunity to get acquainted with and try out AI features such as “Search by highlighting,” “Photo editing,” “Notes assistance,” “Live translation,” “Chat assistance,” and others.

The post In gaming culture, phones are replacing computers: “Charge your dopamine for the whole day in 5 minutes” appeared first on European Gaming Industry News.

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