China’s Tencent on why it’s investing in studios like Gears of War’s Epic Games

chinas tencent on why its investing in studios like gears of wars epic games war judgment

Tencent may not be a name as recognizable to the western video game industry as Activision Blizzard, Electronic Arts, Ubisoft, or even Take-Two, but that’s about to change. China’s premiere Internet services company is branching into the world gaming market, specifically North America, in a very big way. In the past two months alone, Tencent has become the first outside investor to purchase a stake in Gears of War and Fortnite developer Epic Games. It also recently inked a deal with Activision to support a China-exclusive multiplayer entry in the one of the best-selling game franchise ever, Call of Duty Online. There are even rumblings that Tencent will purchase Vivendi’s 60 percent stake in Activision Blizzard.  Tencent is the company to watch in the 2012 game business.

In an interview with VentureBeat, Tencent senior executive vice president David Wallerstein discussed why the company is starting to invest more heavily in the west. It doesn’t necessarily need to. The sheer size of the Chinese gaming market makes it a sustainable environment for a gaming company without branching out into global markets. “China now has more online gamers than the U.S. and, I believe, Japan combined,” said Wallerstein, “So you can run around crazy in the US market, or you can take on China, and your results may be pretty darned similar at the end of the day. The size of the markets is pretty similar. I think this year, the Chinese online game market will be about $8 billion, and the global market for online games is about $15 billion. So it’s roughly half.”

Why then? Why go for Gears of War or League of Legends creator Riot Games, a studio which Tencent bought a majority stake of in 2011. Because Chinese gaming tastes are starting to change.

“We started with very simple, casual games like poker or three-in-a-row games. And then we went into what are called advanced casual game, like racing games, or chasing guys around a map shooting at each other. And then we starting going for the big MMO type worlds, like World of Warcraft and Lineage, that have been popular in the western world. And now we just do every kind of gaming in every kind of genre, including social games and mobile.”

“At the end of the day, for the majority of our cash and revenues and profit… it’s coming from these deep, immersive experiences that really parallel what’s happening with console in the US. The only difference in China is that everything’s online, everything’s multiplayer, and these experiences for the most part are only on the PC.”

Consoles are actually illegal in China, so Tencent’s not necessarily looking to become a global competitor in that environment. It’s merely interested in the high level of quality in big budget console games developed in the west.

Wallerstein’s comments are important to note in light of the ongoing discussion over the changing game industry. Even if game consoles are dying out, the style of big budget development that fueled the technology’s rise remains profitable. For a company with a $52 million market cap like Tencent, the steep cost of AAA development is no great hurdle.


Skateboarding legend says ‘Tony Hawk’s Skate Jam’ will appeal to his fans

Tony Hawk's Skate Jam is now available for free on iOS and Android devices, and Digital Trends had the chance to talk to the legendary skater about its development and how it captures the magic of his best games.

5G’s arrival is transforming tech. Here’s everything you need to know to keep up

It has been years in the making, but 5G is finally becoming a reality. While 5G coverage is still extremely limited, expect to see it expand in 2019. Not sure what 5G even is? Here's everything you need to know.

Intel's discrete graphics will be called 'Xe,' IGP gets Adapative Sync next year

Intel has officially dubbed its discrete graphics product Intel Xe, and the company also provided details about its Gen11 IGP. The latter will include adaptive sync support and will arrive in 2019.

3DMark’s Port Royal lets you benchmark ray tracing on Nvidia’s RTX cards

UL is adding another benchmarking utility to its popular 3DMark suite to help gamers measure their graphics card's ray tracing performance. You'll soon be able to measure how Nvidia's RTX 2070, 2080, and 2080 Ti stack up.

How do Nintendo Switch, Xbox One X compare to each other? We find out

The Nintendo Switch is innovative enough to stand apart from traditional consoles, but could it become your primary gaming system? How does the Switch stack up against the Xbox One?

Cops called to handle ‘Super Smash Bros. Ultimate’ noise end up playing the game

A group of friends were playing Super Smash Bros. Ultimate on the Nintendo Switch when cops arrived to respond to noise complaints from neighbors. In an unexpected twist, the officers ended up playing the game, too.

The third DLC for ‘Spider-Man’ swings onto PlayStation 4 next week

The third part of Spider-Man's episodic DLC, Silver Lining, releases on December 21. The episode focuses on Silver Sable and Hammerhead, and it includes three new suits for Peter Parker.

Spawn creator suggests the antihero could appear in ‘Mortal Kombat 11’

Spawn creator Todd McFarlane hinted that the comic book antihero could join the cast of Mortal Kombat 11 during a Reddit AMA. Spawn previously appeared in SoulCalibur II on the original Xbox.

Hey, Sony! If you make a PS2 Classic, it needs these games

158 million PS2 consoles were sold worldwide during its lifecycle, making it the most successful video game console of all time. It was hard, but we narrowed down the PS2's vast library of games. Here are the best PS2 games of all time.

Grabbing a Switch for the holidays? Here's what you need to know to play online

If you want to play online multiplayer on Switch, you'll need a Nintendo Switch Online subscription. Here's what you need to know about Nintendo Switch Online, from price to features to the awesome library of NES games.

You're not a true fan without these Nintendo Switch exclusives

Who doesn't love a good Nintendo game? If you're looking for great first-party titles for your Nintendo Switch, take a look at our list of the very best exclusives available right now.

Check out the best deals from GameStop’s Game Days Sale

GameStop has hundreds of games available for discounted prices between now and December 25 as part of its Game Days Sale. We checked out the deals and have rounded up all of the best Nintendo Switch, PS4, and Xbox One deals here.

Trash at 'Super Smash Bros. Ultimate'? Use this guide to train up and get good

Super Smash Bros. Ultimate is the biggest game in the entire series, and it can be overwhelming for newcomers not used to the universe-colliding fighting game. Here's what you need to know when you're starting.

Where we droppin’ (presents)? Perfect ‘Fortnite’ gifts for the fans in your life

Chances are someone on your holiday shopping list is a fan of Fortnite. As the most popular game on the planet, there are plenty of Fortnite-themed gift options available for purchase in stores and online. Here are the best ones we found.