Tencent eyes Southeast Asia, not China, for cloud gaming platform

Tencent’s cloud gaming could go on TV boxes, beating Google Stadia and Microsoft’s xCloud to Asia.

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Tencent eyes Southeast Asia, not China, for cloud gaming platform

This article first appeared on Abacus.

Tencent may be China’s biggest gaming company, but it’s not planning to launch its cloud gaming service in China just yet. Instead, the Chinese gaming giant is eyeing Southeast Asia.

Tencent Cloud unveiled its cloud gaming platform at this year’s ChinaJoy, China’s largest gaming convention, where attendees got to try streaming games themselves.

By looking abroad, Tencent is acknowledging the challenges of the gaming market at home. The company suggested that Southeast Asia is a better testing ground than China because of China’s strict regulations on media content.

Tencent might also not face as much competition in the region’s emerging markets. Google and Microsoft are primarily targeting Western markets at first with their own cloud gaming platforms. While Tencent’s service is currently a business-to-business cloud gaming solution, the company’s tech could wind up on hardware that competes with other services.

“We’re looking at partnering with some Chinese set-top box operators,” Li Guolong, product manager of Tencent’s cloud gaming service, told Abacus. “Then we can together promote some AAA games [in Southeast Asia]. This is one of the directions we are talking about with our clients.”

Google’s Stadia service, which is also going to launch on streaming devices like its own Chromecast Ultra, is only set to launch in the US, Canada and Europe. Microsoft hasn’t announced launch markets for Project xCloud, but it says it’s sent xCloud hardware to Azure data centers in North America, Europe and Asia. But the company only has one data center serving Southeast Asia.

Tencent already has experience in the region. And by targeting emerging markets, Tencent knows the price has to be right. Hence its choice of hardware.

“[Consumers in Southeast Asia] might not be able to afford PlayStation or Xbox,” Li said. “But they can use a TV box for gaming.”

While hardware isn’t irrelevant when streaming from the cloud, fast internet connections make it possible to get great results on a wide range of hardware, even for playing AAA games. The hands-on demo at ChinaJoy showed gamers instantly firing up Chinese games like Chinese Parents and Moonlight Blade. Without streaming, the latter game would require a 32.4GB download.

Tencent might also be looking to leverage its cloud gaming technology through live-streaming. The company is a major backer of China’s top two Twitch-like streaming platforms, Huya and Douyu. They’ve developed separate overseas brands, Nimo TV and Nonolive respectively, which Tencent hopes to leverage.

“Going overseas is a focus for us this year,” Li said, “Take Nimo TV. In Southeast Asia, it does esports streaming. Its penetration rate is high in many places… We already provide our video/audio streaming solution to them.”

Tencent had some ideas for how cloud gaming might be used in live-streaming.

“Tencent’s cloud gaming can, in essence, change the way people ‘play’ with live-streaming,” said Yang Yu, the head of Tencent Cloud Gaming Solution.

One example Yang used was allowing instant game demos on various streaming sites. The technology could even enhance advertisements, allowing viewers to play alongside others.

Whether or not Tencent brings all these ideas to fruition remains to be seen. But the ChinaJoy demo at least shows Tencent is serious about cloud gaming. In fact, some people can already try it on the company’s own digital game store WeGame.

“If you have submitted to be part of this test, you can already play games from the cloud [via WeGame],” Li said. “This is actually already proof of cloud gaming being applied in real life.”