Yet, for expects, Tencent as a group and WeChat, its crown jewel, have avoided substantial reprimands and penalties from Chinese authorities. That was then followed by the failed merger attempt between its two videogame streaming platforms. Then actions began unfolding when in 2021, a Tencent subsidiary, Tencent Music Entertainment Group, was stripped of its exclusive rights to some music labels. Until recently, Tencent, China’s social media and video game behemoth, has been largely unscathed by Beijing’s sweeping crackdown on big internet platforms that began in late 2020. China’s not slowing down - not for Tencent at least Unfortunately, regulators have been tightening gaming regulations in China to protect younger users and that has been taxing for Tencent, who reported its slowest quarterly revenue growth on record in the fourth quarter of last year. Hence, when Tencent proposed merging Huya and DouYu–a plan that would have valued the new company at around US$6 billion at the time–the plan was to move its Penguin Esports brand under the combined entity. US’ ‘NOTORIOUS MARKETS’ LIST EXPLAINED: WHY ARE CHINESE COMPANIES LIKE ALIBABA, TENCENT IN IT? As one of the world’s largest online gaming players that were aggressively pushing into the area of professional gaming, also known as e-sports, Tencent saw it as a potential new revenue stream. Fast forward nine months later, Tencent announced that it is shutting down its video game streaming platform Penguin Esports on June 7, citing a change of business strategy.Ī lot like Amazon’s Twitch, Tencent’s Penguin Esports hosts livestreams of professional gaming tournaments and other video game-related content. Few days prior to stalling the deal, SAMR dished out 22 fines of half a million yuan each to the country’s Big Tech firms, citing violations of ‘concentration of business operators’ with respect to a series of mergers and acquisitions deals closed in the last decade.īesides Tencent, the companies fined include Alibaba and Didi. That would simply give Tencent, the world’s biggest games publisher, a dominant role in the gaming industry, especially locally. Based on the regulatory ruling published on the same day the decision were made, SAMR said that Huya and Douyu’s combined market share in the video game live-streaming industry would be over 70% if the merger went ahead. Therefore, stalling that to happen simply sets a precedent for the country’s internet industry. With that comes the end of the freewheeling era for Big Tech companies in China, and thereon, being able to engage in aggressive merger and acquisition activity to achieve market dominance would be a challenge.Īfter all, the merger would have created a video game streaming behemoth worth more than US$10 billion and that would allow Tencent to take on Amazon’s Twitch. When that happened, experts reckon that the decision by Beijing sends a strong signal–that the Chinese authorities are no longer shy to act on antitrust issues. To recall, the Chinese government had never been a naysayer when it comes to merger deals in the country’s technology sector–until July 2021, when the State Administration for Market Regulation (SAMR) blocked Tencent’s plan to merge Douyu and Huya, two video game live-streaming websites it controls. ![]() While the situation was expected to largely subside this year, tech giants like Tencent Holdings are still feeling the brunt - with no signs of slowing down. ![]() Almost overnight, China’s anti-monopoly bureaucrats became a force feared by Big Tech, as they issued hefty fines for deals struck without official approval. Most tech giants in China would agree that 2021 could go down as one of the toughest years for Chinese technology firms as Beijing moved to exert control over the sector that was once freewheeling. Tencent is also being targeted in China’s latest campaign to rein in the potential abuse of algorithms by internet giants.The Chinese authorities are also mulling an overhaul of Tencent’s payments arm.China’s Tencent decided to shut down its video game streaming platform Penguin Esports, citing a change in business strategy.
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