As a gamer why you should know what TenCent is

Last week TenCent bought mobile game developer Supercell for $8.6 billion. What followed was the sound of thousands of games journalists googling “What the hell is TenCent?”


The easiest answer to the question of what is TenCent is to say that it’s the Facebook of China. However this is a terrible oversimplification. It’s like saying the Pope is religious. Or that a car is just a human with wheels.

But before we can talk about what TenCent is let’s talk about China. There are 668M active Internet users in China [source]. And a further 594M active mobile internet users. Those numbers probably wash over you but let’s just remember that the total population of the USA is less than half this at 320M.

Ok, so there are a lot of people in China on the Internet. No big deal right? Well let’s go a layer deeper. 659M Chinese people are active social media users and spend on average 90 minutes a day on social media [source]. At the time of writing the top Social Media applications in China are QQ, QZone, and WeChat [source]. To give you an idea of scale, QQ has more users than Linkedin, Twitter, and Instagram put together [Source]. How are TenCent involved? They own all three; QQ, QZone, and WeChat. That’s a lot of people spending a lot of time on social media.

TenCent

Further to this social media in China is very different from western social media. In China a platform like QQ is used for a lot more than just sharing pictures of cats. 

Chinese Social media users treat a platform like QQ as a one-stop for all their internet needs. They use one platform to tweet, blog, post, listen, game, read, bank, shop, and date. A Chinese Social Media network like TenCent’s closest competitor Sina Weibo are Twitter, Facebook, Tumblr, Instagram and Amazon all rolled into one convenient place.

So what about the video-games? Well gaming is big money in China. Especially on their social media networks. Millions of people are playing games on Chinese Social Media every hour. So when TenCent go and pay $8.6 billion for Supercell you know they mean business. $8.6 billion is a incredible sum of money. In comparison Activision Blizzard paid $5.9 billion for King [Source] which at the time was laughed at but now feels like a steal. The TenCent/Supercell deal is also larger than what Disney paid for Marvel and Lucasarts combined [Source]. When you’re managing to out-shine the House of Mouse on investments you must be doing something right.

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Epic Games, Glu Mobile, Activision Blizzard, Riot Games, and CJ Games have all also had investments or buy-outs from TenCent.

Why is important that gamers are aware of TenCent? Well this is the largest business deal ever made in video games history (maybe even entertainment history). Every gaming blog should be covering it. But they aren’t. The Financial Times took more notice than most games websites. And it makes sense. Gamers focus on the smaller news stories that have immediate rewards or ramifications. This is understandable.

But It’s important for gamers to notice the colossus sized piles of cash that are being slid across the board room table between game studios. Gamers are inherently very-protective of their past-time. When a game like Gone Home gets criticised for not ‘being a game’ [source] or #gamergate hits every game-blog site under the sun, it’s concerning that possibly the biggest deal in gaming history stirs nothing more than a raised eyebrow among the masses.

But this acquisition isn’t bad news! Far from it! TenCent buying Supercell is great news for the games industry. It’s healthy, positive, and a boost that the games industry needs [source]. But when the deal goes relatively un-noticed by gamers, it’s a concern.

China Money

Huge players are making moves in the videogames industry that could have vast-reaching impact. Money is being exchanged that even only five years ago would have been dreamed unimaginable by most game studios. Will the sleeping-dragon of TenCent have much of an impact on the games industry? Only time can tell. But gamers need to take more of a notice when a company like TenCent make a move of this size. Because their hobby has just stepped into a new stratosphere of business and this acquisition could be the rising Star in the East guiding out the way of things to come for the games industry.