How Tencent Secretly Controls (Almost) All Video Games!

Introduction to Tencent:

If I ask you which is the biggest gaming company in the world, you might say Nintendo, Sony, or Microsoft, but one name you might not recognize and have never heard of is Tencent. I'm sure that you'll be surprised to know that Tencent is the largest video game company in the world by revenue.

Tencent's Influence in the Gaming Industry:

You might also not know how this Chinese company controls the entire gaming industry. They fully own Riot Games, Supercell, and Miniclip, and they have stakes in several bigger publishers like Ubisoft, Activision, and a lot more.

Exploring Tencent's Reach:

Well, this video is going to blow your mind away when you realize that most of your favorite games share some connection with Tencent. So let's find out how Tencent Games took over the world.

Tencent's Origin and Growth:

Americans or Europeans may not be familiar with the name, but Tencent is huge in China. It was founded in 1998 by a group of people whose names, pardon me, I will not be able to pronounce. It began as a technology company that launched a chat platform that allowed users to connect online.

Diversification of Tencent:

Later, more features were added to it like chat rooms, games, and personal avatars, and it was hugely successful, going on to become the fourth most visited site on the web. It continues to be the leading news website in China. Its success allowed the company to diversify in various fields, and today we see Tencent everywhere. In China, it owns the most popular social media app, WeChat. It's a super app that supports everything from chatting, texting, video calls, online payments, and file sharing. It has 1.2 billion active users monthly, which is no doubt mind-blowing in itself.

Focus on Video Games Division:

In addition, Tencent owns the majority of music services in China, as well as artificial intelligence, cloud computing, search engines, film production, you name it. What we'd be focusing on is its video games division.

Tencent's Role in Online Gaming:

Tencent Games, Tencent Games took root in 2003. It was meant to focus on online gaming initially. It developed different games for a QQ, such as QQ Fantasy, QQ Dancer, QQ SanGWA, QQ Speed, etc. They belonged to different genres like RPGs, 2DS, and racing games.

Expansion into International Markets:

Afterward, they began licensing games for other developers. Since, as per Chinese regulations, any games developed by a foreign company need a Chinese partner for launch within the country.

Development of In-House Games:

For instance, Tencent released games like Dungeon Fighter and Crossfire in China, which were originally developed by their South Korean partners. Call of Duty was not available in China until Activision partnered with Tencent to bring out Call of Duty Online exclusively.

Innovation and Evolution:

It was developing games of its own under Aurora Studios founded in 2007. They released some popular MMO games such as Moonlight Blade and Legends of Shuǐmiào, which became largely popular in China. One of their games, Rings of Elysium, became an international hit and carved a niche for itself in the battle royale genre.

Expansion to Other Platforms:

Then in 2008, Lightspeed and Quantum were founded, best known for PUBG Mobile, undawned, and Apex Legends Mobile. But Tencent has brought out games in different genres since its inception. They've got five internal studio groups working on everything from MMOs to AAA games. Currently, they're focused on the mobile gaming sphere but plan to spread it out to other platforms as well.

Introduction of More Studios:

In 2010, the More Fun studio group came into being, which didn't focus on the global markets but their games on Naruto and One Piece are quite successful in China. Next Studios was also established in 2017 and primarily focuses on original and indie games.

Investment and Acquisition Strategy:

Tencent had made a fortune from licensing, and developing its games, and other tech products. It was now time to invest, so it began to acquire stakes in gaming companies beyond China. And one of the early ones was Valorant and League of Legends developer Riot Games. In 2011, Tencent bought more than 90 percent of its share capital, and by 2015, it owned the company entirely. Riot Games remains an American developer but belongs to one of the largest companies in China.

Venturing into Gaming Consoles:

Perhaps you did not know that Tencent has brought out its very own gaming console, TGP, or Tencent Gaming Platform, released in 2016. It is commercially known as Blade and carries an Intel chip that runs Windows 10. Games like PUBG, Need for Speed, and League of Legends were made available on this console.

Entry into Online Marketplaces:

Surely, familiar with Steam, the online marketplace for PC games, it is the go-to site for purchasing games for your computer. Well, in 2017, Tencent launched a rival platform, WeGame, which offered a plethora of games, content, community services, and much more. Thus, it was exactly like Steam but with one distinction: it had more users than Steam since it was an upgraded version of the Tencent Games platform.

Dominance in Mobile Gaming:

Like China, which is known as the world's factory for electronics, Tencent is like a factory for the world's mobile games. They have gained expertise in developing quality and sometimes AAA games for mobile devices. This, along with access to the Chinese gaming market, often makes them the first choice of Western game publishers who are trying to catch up with mobile gaming.

Subsidiaries and Success Stories:

Among other subsidiaries of Tencent, the Timi Studios group set up in 2014 is noteworthy. It was an umbrella group for its different independent studios, and they made stellar games such as COD Mobile and Pokémon Unite. Their most successful game to date is Honor of Kings, which features among the highest-grossing titles in any list of chart-toppers.

Impact of Regulations and Government Policies:

In 2010, about 100 million people played it daily. So much so that it got Chinese gamers seriously addicted. Articles began to appear in the media decrying the game, and consequently, China had to amend its minor protection laws. As a result, they cracked down on their fast-growing gaming industry, restricting playtime to only three hours a week. A proper curfew was implemented, demarcating the hour's people can play games for, which Tencent had to put in a facial recognition system dubbed Midnight Patrol.

Global Expansion Amidst Challenges:

As a result, Tencent, along with other Chinese game companies, suffered significant losses, as less playtime meant less money. Although China is the largest video game market, with the Chinese government tightening regulations around gaming, Tencent had to push harder on its strategy of expanding overseas.

Influence and Controversy:

And now we arrive at the revelatory chapter of the video, wherein you'll come to know about the vast allegiance that Tencent owns. I've already told you about Valorant's developer Riot Games, but do you know that they own a 40% stake in Epic Games, the developer company of Fortnite and Unreal Engine? It also owns an 84% share in Supercell, the studio behind Clash of Clans. From Ubisoft to Paradox Interactive, publisher of City Skylines, to Miniclip, parent to Subway Surfers, Max Payne developer Remedy Entertainment, Netmarble, the developer of Marvel Future Fight, Karina of Free Fire, Don't Nod, the studio behind Life is Strange, PUBG developer Krafton, and Dark Souls developer From Software, Tencent owns a stake in them all. Even Discord and Roblox, also own shares of Activision, the parent company of Call of Duty, which were later bought over by Microsoft.

Controversies and Challenges:

So it is staggering just how many of the games we play bear a relation to Tencent, not counting the ones I left out to keep this video short. It is estimated that they either completely own or have a stake in some 30 to 40 gaming companies. The streak continues, with Tencent acquiring small companies like Articon Shark and even reaching for stakes in bigger companies. Some time back, a rumor was afloat that Tencent was raising cash to take over Take-Two Interactive. That turned out only to be a rumor; otherwise, what might have happened to GTA?

Controversies and Allegations:

Tencent has always been surrounded by controversy, with the biggest one being that they plagiarize other products. Their first online venture, QQ.com, was a ripoff of the Israeli messaging client ICQ. Even Jack Ma, the co-founder of Alibaba, exclaimed that most of Tencent's products were sheer copies. It does not seem to matter in China, where policies seclude citizens from the rest of the world. In other news, the company had to air an apology when clips of harassment in the workplace surfaced in 2017. It was even alleged that Tencent shares the data of its users with the Chinese government, as the laws therein dictate that companies must submit such information as and when required.

Global Perception and Response:

Thus, Tencent is usually looked upon with a fair bit of suspicion. At the time of the launch of the Epic Games Store, there was a buzz that Tencent would use it as an espionage tool. This is the reason why we hear so much about a US ban on TikTok these days it is also owned by a Chinese company, ByteDance. Well, a company would only seek to expand itself, and in December 2021, Tencent created a global brand, Level Infinite, to cater to the marketing needs of video games by conducting esports events and such. They've been entrusted with the launch of Tencent's Resurgence Division in Southeast Asia and have proven themselves with the release of Arena of Valor developed by Timi Studios.

Conclusion and Outlook:

With all the negative sentiment about China, the good thing about Tencent is that the companies they take over are allowed to run on their own accord, with no interference from the new owners. Although it wouldn't be wrong to say that they create less and own more. With their deep pockets and experience in developing AAA mobile games, it remains to be seen where this company goes. As I mentioned earlier, they also own Miniclip, which is now the owner of Subway Surfers. 

So if you want to know its story, then I also made a blog on it, See you next time.