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Tencent’s next level up: fewer big foreign franchise games, more in-house

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In a sea change at China’s Tencent (0700.HK), opens new tab, an easy-to-play game of cute characters tackling obstacle courses has taken precedence over developing a big-budget sophisticated foreign franchise for smartphones.

Since late last year, the world’s largest video games company has, according to sources, redeployed hundreds of people from the team developing “Assassin’s Creed Jade” for mobile – a multi-year project with France’s Ubisoft (UBIP.PA)

They are now working on recently launched “DreamStar” – Tencent’s answer to rival NetEase’s (9999.HK), hit “Eggy Party” and the company’s most high-profile attempt to date at the so-called party game genre which offers simple gameplay, minigames and encourages players to hang out and chat.

As a result, “Assassin’s Creed Jade” – an action-adventure game set in ancient China that has been under development for mobile for at least four years – will likely be released in 2025 instead of this year, according to three sources familiar with the matter. They were not authorised to speak to media and declined to be identified.

The redeployment of resources highlights the trends forcing a strategic pivot at Tencent. Firstly, developing big-name Western franchises for mobile phones tends to yield thin margins.

At the same time, rivals have had breakout hits with ostensibly niche products that offer new takes on gaming such as as NetEase’s “Eggy Party” and miHoYo’s anime-style fantasy game “Genshin Impact”. Moreover, the games were developed in-house so their profits are all their own.

Tencent had, for years, great success by developing for smartphones international hits like Activision Blizzard’s shooter game “Call of Duty” and the battle royale game “PUBG” by South Korea’s Krafton (259960.KS).

But such franchise games – called IP (intellectual property) games – are costly to make. Royalty fees of 15% to 20% of sales are typical, Apple’s (AAPL.O), opens new tab App Store takes a 30% cut while marketing and user acquisition expenses can cost another 30% to 40%, the sources said.

After a string of IP game setbacks, Tencent plans to be more selective. “We’re focusing on fewer bigger budget games. Typically, we’re seeking to make the biggest bets around games that either iterate on a successful IP … or games that are iterating around proven gameplay success within a niche and taking those to a more mass market,” Tencent Chief Strategy Officer James Mitchell told an earnings call on Wednesday.

Tencent is now also pushing for royalty fees to fall to under 10% of sales in some negotiations, according to one person with direct knowledge of the matter. “That would have been almost unthinkable just a few years ago. Tencent used to be far more generous,” the person said.

Tencent declined to comment on details of its strategic shift.

SETBACKS AND BAMBOO SHOOTS

On Wednesday, Tencent reported a slight decline in fourth-quarter gaming sales and also flagged that overall gaming revenue this quarter would be soft compared with the same period last year when gaming sales surged as pandemic restrictions were lifted.

Pony Ma, Tencent’s founder and chief executive, has been blunt that the company’s video game division – which last year generated 180 billion yuan ($25 billion) in sales or around 30%of overall revenue – needs to do better.
Competitors have continued to create new products, “leaving us feeling we have achieved nothing,” he told a stadium of employees in Shenzhen at the company’s annual meeting in January, according to a separate source with direct knowledge of the event.

That month, Tencent also launched its “Spring Bamboo Shoots Project”, aiming to incubate in-house games with novel gameplay and offering budgets of up to 300 million yuan ($42 million) per game. While that is much less than budgets of 1 billion yuan for a major franchise, the initiative signals Tencent is willing to take more risks on non-conventional game design, the sources said.

Some major setbacks have only increased the sense of urgency for change.

Last year, Electronic Arts (EA.O),  discontinued “Apex Legends Mobile”, a game developed by Tencent, with executives at the U.S. firm saying it had fallen short of expected quality.

In December, Tencent axed development of a mobile game based on the “Nier” franchise from Japan’s Square Enix (9684.T), in part because the Chinese firm struggled to find a compelling monetisation model given its expensive development costs and franchise rights, sources have said.

“Mobile games studios have learned that IP is not the magic bullet for user acquisition it once was,” says Serkan Toto, founder of game industry consultancy Kantan Games.

Tencent has also seen a key in-house game bomb. “Undawn”, a zombie apocalypse shooting game that Hollywood star Will Smith was hired to endorse, flopped spectacularly despite having a budget of close to 1 billion yuan with more than 300 developers, according to two of the sources.

Last month, one year since its launch, “Undawn” brought in revenue of just $287,000, according to research firm Appmagic.

Western companies have also started to shift away from outsourcing mobile game development to Chinese companies like Tencent. Microsoft’s (MSFT.O), Activision Blizzard, for example, has just launched “Call of Duty Warzone Mobile” which will compete directly with Tencent’s “Call of Duty Mobile”.

Adding salt to the wound, Tencent’s top two games saw revenue slide during the week-long Lunar New Year holidays in February. “Honor of Kings” and “PUBG Mobile”, which are nine and seven years old respectively, suffered 7% and 30% drops compared to the holiday period last year, according to one of the sources who was briefed on the matter.

Source: Reuters

 

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Team ATK Oshun excels at 2024 Online Championships held on 13 April 2024

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Mind Sports South Africa’s (MSSA) 2024 Online Championships held on 13 April 2024 showed sterling results.
The championship was yet another chance for many esports athletes to qualify for MSSA’s National Team Trials to be held on 25 May 2024 at which the team will be selected to officially represent South Africa at the African Qualifiers which lead up to IESF’s 16th World Esports Championships to be held in Riyadh, Saudi Arabia in October and November 2024..

All Registered Players who have finished in the top three places, or the top 20% – whichever is greater, are entitled to enter trials.

However, it must be remembered that all players must have a valid passport to participate in the National Team Trials.

It was indeed exciting to watch just how much all the female teams have improved.

Team ATK Oshun (ATK Club Sport) being a female team astounded all with their skill and sportsmanship. The team demolished all ATK Club Sport opposition to ultimately won the premier event overall and qualify for the National Team trials to be held on 25 May 2025.

IESF’s 15th World Championships will be played to the following titles:

  • Counter-Strike 2
  • Counter-Strike 2 – Female division
  • DotA 2
  • eFootball
  • Mobile Legends, Bang Bang
  • Mobile Legends, Bang Bang – Female division
  • PUBGM

The high standard of play saw 37 Registered Players from six provinces being awarded Provincial Colours. Only Limpopo, Free State, and Northern Cape did not have Registered Players who did not earn provincial colours.

Title Name of player/team Club Provincial Colours awarded
Clash Royale – Premier Johan Coetzee Middies Mpumalanga
Clash Royale – High School Aryan Maharaj PR0NHS
Counter Strike: 2 ATK Oshun
Kaylee Ludick ATK Club Sport Gauteng
Jessica Eleez Greeff ATK Club Sport Gauteng
Christin Brazier ATK Club Sport Gauteng
Megan van der Westhuizen ATK Club Sport Gauteng
Kayhla Rose Calder ATK Club Sport Gauteng
DotA – Premier ZAG DOTA 1
Suhail Khan ZAG Academy Gauteng
Travis John Waters ZAG Academy Western Cape
Mark Kilian Lehle ZAG Academy Gauteng
Mohammad Dhooma ZAG Academy Eastern Cape
Nicholas Dammert ZAG Academy Gauteng
eFootball – Premier Aslam Parker PES Society Gauteng
FIFA 24 – High School Daiyaan Hendricks PES Society Western Cape
Mobile Legends – Premier
Mavericks
Matthew Tatalias Mavericks Gauteng
Damian Bransby Mavericks Western Cape
Preshan Pillay Mavericks Gauteng
Mohammad Azhar Ansari Mavericks KwaZulu Natal
Taygan Gabriel Mavericks KwaZulu Natal
Luke Green Mavericks Western Cape
Mobile Legends – Premier – Female
AHG
Je’nielle Cavanagh PES Society Western Cape
Inez Pringle PES Society Western Cape
Salma Parker PES Society Western Cape
Ra’isha Prout PES Society Western Cape
Fatimah Prout PES Society Western Cape
Mia Anthony PES Society Western Cape
PUBGM
Team uEnvy
Richard Henry ZAG Academy Eastern Cape
La-eeq Arendse ZAG Academy Western Cape
Kyle Dudley ZAG Academy Western Cape
Clayton Leak ZAG Academy Western Cape
Rocket League – Premier – 1 v 1 – Premier Nathan Strange Hoërskool Klerksdorp
Rocket League – Premier – 1 v 1 – High School Luther Peens Hoërskool Klerksdorp
Street Fightter V – Premier Marnus van der Merwe Hoërskool Klerksdorp North West
Tekken 8 Stasch Cloeta Team PlayBell Western Cape
Valorant – Premier
TuksValorant
Tapiwanashe Keith Matema TuksEsports Gauteng
Kyle Halvorsen TuksEsports Gauteng
Jaden Connor Swarts TuksEsports Gauteng
Ronald James Tyler Wheeldon TuksEsports Gauteng
Alejandro Luca Sartini-Kruger TuksEsports Gauteng
Armand Pierre van der Colf TuksEsports Gauteng
Sportsmanship Award Je’nielle Cavanagh PES Society
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PAGCor Welcomes Lawyer Wilma Eisma as New President and Chief Operating Officer

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The Philippine Amusement and Gaming Corporation (PAGCor) today welcomed its new President and Chief Operating Officer, lawyer Wilma Eisma, who took her oath of office before Executive Secretary Lucas Bersamin in Malacanang this morning.

“We are happy to welcome Atty. Wilma Eisma as PAGCor’s new President and Chief Operating Officer,” PAGCor Chairman Alejandro Tengco said. “We know she will be a great asset and her vast experience in both the government and private sectors will surely be put to good use here.”

Tengco said he witnessed Eisma’s oath-taking in Malacanang this morning. She then immediately joined her first PAGCor board meeting in the afternoon as the agency’s first ever woman President and Chief Operating Officer.

A lawyer by profession, Eisma earned her law degree from the Ateneo de Manila University and was a member of the Board of Directors of the Development Bank of the Philippines before joining the state gaming firm.

Prior to that, she also served as the first woman Administrator and Chairman of the Subic Bay Metropolitan Authority (SBMA).

Her private sector stints include leadership roles in PMFTC Incorporated, the Philippine affiliate of Philip Morris International.

She also held key positions at the Department of Trade and Industry where she worked at the Office of the Secretary and in the Office of the Majority Leader in the House of Representatives, among others.

Eisma succeeded Atty Juanito Sanosa Jr who resigned as PAGCor President and Chief Operating Officer last January.

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Maharashtra Government rewards state’s Asian Games 2022 Esports athletes with INR 10 lakhs; marks historic moment for Indian Esports

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In a groundbreaking move, the Directorate of Sports and Youth Services of the Government of Maharashtra has rewarded a significant amount of INR 10 lakhs to each Esports athlete of the state who represented India in the Asian Games 2022, held in Hangzhou. This marks a historic moment for Indian Esports, as it is the first time any state has included Esports alongside mainstream sports in prize money rewards for its state players in a major tournament. The recipients of this monetary reward include Darshan Bata, captain of the DOTA 2 team, along with his teammates Krish Gupta, Ketan Goyal, and Shubham Goli, as well as League of Legends athlete Samarth Trivedi.

Expressing his gratitude, Darshan Bata, the captain of the DOTA 2 team who hails from Mumbai, said, “I would like to express my sincere thanks to ESFI and the Maharashtra government for honoring us and recognizing and supporting Esports.”

Esports made its debut as a full-fledged medal event at the Asian Games 2022, where a total of 476 athletes from 30 different countries competed for gold medals across seven titles. India participated in four of these titles, including DOTA 2, EA Sports FC Online, League of Legends, and Street Fighter V: Champion Edition.

“It has been a great experience at Asian games, I am grateful for the support I received from the Maharashtra government and I really appreciate the efforts ESFI has contributed to our journey,” stated Ketan Goyal of Pune who was a part of the DOTA 2 team at the Asian Games 2022.

The talented Indian contingent for the Asian Games was sent by Esports Federation of India (ESFI), who had organized open for all nationwide online qualifiers to select the best and most deserving athletes to compete for the nation at the tournament.

“Really happy to see that Esports is getting recognized and we are being aided by the government. Thank you for the support to Maharashtra Government and a big shoutout to ESFI for giving us this opportunity to represent India in the Asian games,” highlighted Krish Gupta of Pune, a member of the Indian DOTA 2 team.

The League of Legends team, in particular, achieved a historic fifth-place finish at the 19th Asian Games after competing against top-tier teams from around the continent.

“I am really grateful to the Maharashtra government for providing us with the financial support. It is amazing to see Esports being recognized by the Government. A huge shoutout to ESFI for giving us the opportunity and platform to compete at the Asian Games 2022 in Hangzhou,” commented Samarth Trivedi of Thane who played a pivotal part in the country’s performance in League of Legends at the tournament.

Prior to the 19th Asian Games, India had also secured a remarkable bronze medal at the Commonwealth Esports Championships in DOTA 2, showcasing the country’s prowess in video gaming on the international stage.

“Thank you ESFI and team for all you support throughout Asian games 2022. We are really blessed and honored by Maharashtra Government for supporting Esports players and considering Esports in events like Commonwealth and Asian Games,” noted Shubham Goli, a resident of Pune who represented India at both the Commonwealth Esports Championships as well as the Asian Games 2022 in DOTA 2. The latest FICCI-EY report titled ‘#Reinvent: India’s media & entertainment sector is innovating for the future, India is expected to have 20 international teams by 2024.

The Maharashtra government’s recognition and support of Esports signals a significant milestone in the journey towards mainstream acceptance of competitive gaming as a legitimate sport in the country.

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