China closes siege on gaming, Tencent ups its bet on the West

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You may not even know what Tencent is, but you’ve probably played a title from this Chinese technology conglomerate, considered the world’s largest game company in terms of revenue by consultancy Newzoo, and which has been expanding its empire to the West.

Last Tuesday (6), Ubisoft announced that the Chinese conglomerate has increased its stake in the French company. Under the agreement, Tencent, which already held about 5% of Ubisoft’s shares, will also have 49.9% of Guillemot Brothers Limited, the company of the company’s founders and its largest shareholder, in exchange for an investment of 300 million euros. euros (R$ 1.5 billion).

As part of the deal, the Chinese company may also increase its direct stake in Ubisoft to around 10%. Control of the company, however, remains with its founders, the Guillemot family.

“The expansion of the agreement with Tencent further strengthens Ubisoft’s ownership interest around its founders and provides the company with essential stability for its long-term development,” CEO Yves Guillemot said in a statement released by the company.

Tencent was founded in 1998 in the Chinese city of Shenzhen. Its first product was an instant messaging program that copied the old ICQ even in name —OICQ, now called QQ—, but which became very popular in China.

Taking advantage of the app’s user base, the company began expanding its portfolio in the early 2000s, including games in it. Initially, the bet was only on casual titles or on licensing and adapting games for the Chinese audience. That changed in 2011, when the company became a majority shareholder in Riot, developer of “League of Legends”, acquiring 92.8% of the company’s shares.

The investment in the Californian company ushered in a new phase for Tencent in the games market, which began investing in dozens of foreign studios and developers.

In addition to Riot, whose remaining shares were acquired in 2015, are among the studios fully controlled by the Chinese conglomerate: the American Turtle Rock Studios, famous for multiplayer shooters like “Evolve” and “Back 4 Blood”, and the Norwegian Funcom, specializing in MMOs and developer of the survival game “Conan Exiles”.

These studios are joined by others in which, as with Ubisoft, Tencent shares a stake with other groups. For example:

• Epic Games (40%): It is itself a US-based conglomerate of studios and companies, responsible for “Fortnite” and developer of the Unreal Engine game creation tool, one of the most used in the industry.

• FromSoftware (16.25%): Japanese studio creator of the series “Dark Souls” and the hits “Bloodbourne”, “Sekiro” and “Elden Ring”.

• Supercell (84%): Finnish mobile game studio, responsible for “Clash of Clans”, “Clash Royale” and “Brawl Stars”.

• Don’t Nod (22.6%): French company known for developing successful graphic adventures such as “Life Is Strange” and “Tell Me Why”.

Despite having full or majority ownership in some of these studios, Tencent appears, at least externally, to maintain a policy of non-intervention in the way they are managed.

“[A Tencent] takes care of her ‘family’, but, from a distance, she seems to let the companies she buys or invests remain autonomous”, said analyst Daniel Ahmad to the American website Polygon. “Riot remains Riot, Supercell remains the Supercell.”

In 2019, Tim Sweeney, founder and CEO of Epic Games, had already exposed this when talking about his company’s relationship with Tencent. “We have a number of outside investors now. Tencent is the biggest. All of Epic’s investors are our friends and partners. None can dictate Epic’s decisions.” a series of tweets in response to a rumor that the Chinese company had installed spyware on the Epic Games Store. “All major decisions about Epic are made here in the US and as CEO I am 100% responsible for them.”

Participation in foreign studios gains importance for Tencent at a time when the Chinese government increases the siege of the country’s technology industry, including the games sector, tightening regulation and creating barriers to the consumption of online games.

Under Chinese law, all new video games must be approved by a government body before being sold to the public. In April, after almost a year without approving any titles, China released games again. Since then, 241 titles have been approved, according to Hong Kong’s South China Morning Post, but none from Tencent or NetEase, the country’s two biggest game makers.

In addition, since August of last year, minors can only play online for an hour a day, and only from Friday to Sunday — Tencent, the developer of “Honor of Kings”, whose success has already troubled the Chinese government, is one of the hardest hit. by the rule.

The result of this can be seen in the company’s balance sheets. In the latest document released in August, the company reported a 1% drop in gaming revenues in the second quarter of the fiscal year, both domestically and abroad — a result attributed to the slowdown in the games market as a whole. In the previous quarter, however, while the company saw its gaming revenue drop 1% in China, earnings abroad grew 4%.

Even with this recent expansion to the West, the domestic market still accounts for about 75% of Tencent’s revenue from games. Something that, at least by its most recent moves, could change in the not-too-distant future.

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game tip, new or old, for you to test

Nintendo Switch Sports

(Switch)

As far as is known, Queen Elizabeth II, who died last Thursday (8), was not a big fan of video games. Still, according to the British tabloid The Mirror, the monarch was delighted with the “Wii Sports” bowling game when Prince William won a Wii from his then-girlfriend Kate Middleton. If you have a Wii tucked away in your closet, you can dust off the console and experience the game that captivated the queen. If not, your best option is the “Nintendo Switch Sports”, the 2006 game update for the Switch. In it, the player uses the controller’s motion sensors to play six sports, including, of course, bowling.

update

news, launches, business and what else matters

• Ubisoft revealed at a special event about its upcoming releases planned for the future of the “Assassin’s Creed” franchise. In addition to “Mirage,” announced last week, the company revealed that the next big game in the series will be set in feudal Japan. It also announced a new mobile game set in ancient China and a mysterious title that seems to have something to do with witches. With the exception of “Mirage”, scheduled for 2023, all games do not yet have a release date.

• The company also revealed a partnership with Netflix to release three free games exclusive to the streaming platform’s subscribers starting in 2023. The first title will be a sequel to “Valiant Hearts”, a puzzle/adventure inspired by World War I stories; the second, a new game in the “Mighty Quest” action series; and, finally, a mobile game from the “Assassin’s Creed” franchise. Netflix also announced that it will produce a live-action series based on the franchise.

• Disney announced at a special event about its upcoming releases in the world of games that it is producing a game starring Captain America and Black Panther that will take place during World War II. The title, still without a name revealed, should mix action and espionage and has the participation of Amy Hennig, screenwriter of the “Uncharted” franchise.

• In a move that seems even coordinated with the last newsletter, Nintendo announced that it will be removing “loot boxes” from the mobile game “Mario Kart Tour” in October. Currently, the game allows you to buy “pipes” that give random prizes, such as characters and cars. The mechanics will be replaced by a virtual store, where the player will be able to buy the item they choose.

• After Microsoft’s president said he hopes to keep the “Call of Duty” series on Sony consoles for many years, PlayStation CEO Jim Ryan said that the American company’s real proposal only guarantees a deal for three more years beyond the current one. contract, which would be “unacceptable on many levels”.

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games that will be released in the next few days and promotions that are worth it

13.set

“ScourgeBringer”: BRL 39.90 (iOS), price not available (Android)

“Little Orpheus”: BRL 77.45 (Switch), price not available (PC, Xbox One/X/S, PS 4/5)

14.set

“You Suck At Parking”*: BRL 59.96 (Xbox One/X/S), price not available (PC)

15.set

“Splitgate”: Free (PC, Xbox One/X/S, PS 4/5)

“Despot’s Game”*: BRL 28.99 (PC), price not available (Xbox One/X/S, PS 4/5, Switch)

“Bear and Breakfast”: BRL 37.99 (Switch)

“Wayward Strand”: BRL 74.95 (Switch), price not available (PC, Xbox One/X/S, PS4/5)

“Metal: Hellsinger”*: BRL 147.45 (Xbox X/S), BRL 214.90 (PS 5), price not available (PC)

17.set

“Return to Monkey Island”: BRL 64.95 (PC, Switch)

*Available on Xbox Game Pass

Promotions of the week

• A promotional package with 17 games from developer 2K is on sale at Humble Bundle. For US$ 16 (R$ 82) you get all the games from the “XCOM” and “Bioshock” series, as well as “Boderlands 3”, “Civilization 6”, the remastered edition of “Mafia”, among others. The promotion runs until the 22nd. Part of the amount paid will be donated to a charity.

• In another benefit, the Humble Bundle, in partnership with Disney, is selling a 17-game bundle, which includes titles from the “Star Wars” and “Aliens” franchises, as well as remastered classic point-and-click adventures. For US$ 10 (R$ 51) it is possible to purchase games such as “Lego Star Wars: The Complete Saga”, “Star Wars: The Force Unleashed”, “Grim Fandango Remastered”, “Full Throttle Remastered”, among others. The promotion runs until the 24th and part of the amount raised will be donated to a charity.