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Tencent reboots game streaming business after blocked Huya-Douyu merger

Written by Mengyuan Ge Published on     2 mins read

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Tencent is cementing its presence in the game streaming space.

After the Tencent-orchestrated merger of Huya and Douyu was halted by Chinese antitrust regulators in July, Tencent subsidiary Interactive Entertainment Group, or IEG, announced a series of department and personnel adjustments to set up an eGame Product Center. The new unit will develop the operations of eGame, an online streaming platform owned by Tencent, Chinese media Jiemian News reported on Thursday.

Huang Lingdong has been appointed as general manager of the eGame Product Center and will report directly to Ma Xiaoyi, senior vice president of Tencent Group. Ma is also chairman of Huya. Jin Yibo, co-CEO of TJ Sports, which manages League of Legends in China, will be the assistant general manager of the center and report to Huang Lingdong.

The shuffles seem to indicate that Tencent aims to maintain its dominance within the game streaming space in China. Huya and Douyu are the two largest game livestreaming platforms in China, with a combined market share of more than 70%. Tencent holds a stake in each company, while its own game streaming site, eGame, is the fourth most popular in the country.

Last month, China’s State Administration for Market Regulation (SAMR) blocked the merger of Huya and Douyu due to antitrust concerns.

One of the terms of the Huya-Douyu merger laid out by Tencent was that the company would sell eGame to Douyu for USD 500 million. But this was called off when SAMR stepped in last month.

Douyu, Huya, and eGame face stiff competition from other companies like Bilibili and Kuaishou, which are luring Chinese gamers to livestream their play sessions. ​​The size of China’s game livestreaming market has grown rapidly in recent years. It is expected to scale up to RMB 20 billion (USD 3 billion) in 2021. Around 350 million people in China watched game livestreams last year; most of them were under 30 years old.

Considering the regulatory risks and the rate of return on investment, Tencent gained a controlling interest in Huya in April 2020 and is now unlikely to acquire a larger stake in Douyu. Redirecting resources to eGame ensures that Tencent maintains its influence in gamer-focused livestreaming, according to Jiemian News.

Read this: China has the world’s tightest rules for video games, and they may get even stricter

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