Ten­cent con­quers over­seas mar­ket with a block­buster

China Daily (Hong Kong) - - BUSINESS - By SHI JING in Shang­hai shi­jing@chi­nadaily.com.cn

So the com­pany’s strat­egy is to grow big­ger over­seas and come back later.” Li Hualiang, founder of Shine­zone

Chi­nese game com­pa­nies are pit­ting their wits against over­seas on­line ri­vals as they bid to break into ex­port mar­kets.

Lead­ing the pack is in­ter­net gi­ant Ten­cent Hold­ings Ltd, which launched Strike of Kings, the English version of its money-mak­ing Honor of Kings, on Ap­ple’s App Store and Google Play Store in May.

“The move was cru­cial for Ten­cent as it bids to ex­pand,” said Peter War­man, chief ex­ec­u­tive of­fi­cer of game in­dus­try re­search firm New­zoo.

In a well re­hearsed roll out, Ten­cent re­placed cult Chi­nese char­ac­ters, such as Li Bai and Zhuge Liang, with cel­e­brated Western su­per he­roes like Bat­man and Van Hels­ing.

It cer­tainly worked as more than 1 mil­lion over­seas users have down­loaded Strike of Kings on Google’s Play Store.

But then, Ten­cent had al­ready tested the over­seas wa­ters when it l aunched the Korean version in April.

Within four weeks, Strike of Kings was num­ber one on Ap­ple’s App Store and Google Play Store with a monthly turnover of 30 mil­lion yuan ( $4.4 mil­lion).

It was a sim­i­lar story in Thai­land and Viet­nam last year. As al­ways, Ten­cent had done the ground work, fol­lowed by a whirl­wind round of ac­qui­si­tions.

Last year, it bought Fin­nish mo­bile game com­pany Su­per­cell, which is fa­mous for Clash of Clans, for $8.6 bil­lion.

In 2015, Ten­cent snapped up Riot Games in the United States af­ter it had de­vel­oped League of Legends, which grossed $1.9 bil­lion and is the most prof­itable PC game in the world.

“Ten­cent al­ready has the lion’s share in the do­mes­tic mar­ket,” War­man, of New­zoo BV, said. “But now it must in­crease its over­seas mar­ket share to main­tain steady growth.”

Smaller play­ers are also try­ing to mus­cle in on the ex­port mar­ket.

Shine­zone Ne twork, which was set up in Shang­hai six years ago, has been ex­plor­ing ways to move into Europe, the US and South­east Asia.

The com­pany hopes to com­plete two ac­qui­si­tions in the North Amer­i­can mar­ket in the sec­ond half of this year.

“The Chi­nese sec­tor is now highly com­pet­i­tive and led by gi­ants such as Te n c e n t , w h i l e s m a l l e r com­pa­nies find i t d i ff i - c u l t t o d e v e l o p ,” s a i d L i Hu a l i a n g , founder of Shine­zone.

“So the com­pany’s strat­egy is to grow big­ger over­seas and come back later,” he added. “The Chi­nese mar­ket is so big that we can­not af­ford to lose.”

A New­zoo re­port, re­leased dur­ing last year’s China Dig­i­tal En­ter­tain­ment Expo and Con­fer­ence, showed that games de­vel­oped by do­mes­tic com­pa­nies made $4.65 bil­lion in over­seas in­come in 2016.

The sur­vey also re­vealed that com­pa­nies here took a 17.4 per­cent slice of the global mar­ket, which was worth $26.7 bil­lion.

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