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Tencent Seeks Western Audience Via Nintendo Console Games


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Chinese tech giant Tencent has revealed plans to expand beyond its native China, with the help of Nintendo consoles.

The the Wall Street newspaperreports Takashi Mochizuki, according to “a Tencent official, who asked not to be identified.”

“What we want is to grow out of China, and one of the targets is console game players in the US and Europe. We hope to make console games with Nintendo characters and learn the essence of making console games from the engineers at Nintendo.

It was also reported that when Nintendo started limited distribution of Nintendo Switches in China through Tencent, Nintendo shares rose 14%. Nintendo did not respond to comments from the Wall Street Journal.

Analysts at Niko Partners (an Asian-focused game analytics company) also spoke to the Wall Street Journal about what Tencent is doing. While Daniel Ahmad focused on how Chinese developers are focusing more on women, managing partner Lisa Cosmas Hanson downplayed the importance of console game development to the U.S. market for Tencent. She then unintentionally gave a frightening theory.

“Tencent skillfully pursues silent global domination, through expansion primarily in the form of major and minor investments in [videogame] companies in the sector around the world without renaming them Tencent ”,

Tencent owns 40% of Epic Games (the Epic Game Store, Fortnite, Gears of War), 80% of Grinding Gear games (Path of exile) and 100% from Riot Games (League of Legends); as well as smaller actions in Ubisoft, Activision Blizzard, Paradox Interactive, Funcom, Fatshark, etc.

Analysts have also started to theorize that Tencent could be allowed to use Nintendo IP addresses and characters in mobile games in the region. This may have been confirmed by Nintendo chairman Shuntaro Furukawa during a question-and-answer session with investors.

In the half-year financial results briefing for the year ending March 2020 Q&A Summery document, question # 7 (page 4), presents an investor question about the company’s business plans in China.

Furukawa explained his intention to release the Nintendo Switch in the country, but even if he receives the authorization during the current fiscal year

“I would like to check the progress of your business plan in China. There was a recent media report that the software had been approved, but there doesn’t appear to be much change. Are there any obstacles? In the future, when do you expect to see the effect of this initiative on revenues?

Furukawa: We are working with Tencent to prepare for the launch of the Nintendo Switch in China, as we previously announced. There have indeed been media reports indicating that certain products such as software have been approved. However, we need to get various approvals, including these before launch, so we are currently working on each of these processes. When specific information can be announced, I believe Tencent will make an announcement in China, and Nintendo will then share the necessary information according to their announcement.

We did not take into account sales in China in our financial forecast for the current year, and although the launch takes place during the current year, we do not foresee any significant impact on the results. commercials this year.

While it looks like the two companies will mutually benefit from the deal, there are factors that could act as barriers for both.

The Chinese government recently introduced new laws to limit the time children spend playing. In November 2018, Tencent had started monitoring the time under 12s spent playing their games online and showing legal identification. This was after the company lost $ 20 billion in August 2018, after the Chinese government recommended fewer game approvals. Tencent’s expansion into the Western market seems to make a bit more sense in at least one way.

While the Chinese Online Gaming Ethics Board banned nine games in December 2018, the Chinese government approved more than 80 games in January 2019 after a freeze for several months. The Financial Time claimed there had been “bureaucratic wrangling” from a media regulator, before a new one was formed.

In the West, “getting to bed with China” couldn’t be a more troubling phrase in recent months, especially for gamers. It started with concern about the impact of Chinese investment and audience size on decisions by American companies, after NBA Houston Rockets general manager Daryl Morey. showed support for the Hong Kong protests in early October 2019, resulting in the Chinese government refusal to broadcast NBA games in China.

Since then, NBA officials have done their best to contain the damage. South Park ‘The “Band in China” episode also mocked entertainment companies such as Disney for trying to appeal to Chinese government censors.

There is also a long list measures taken by companies to avoid upsetting the Chinese government in recent years. These include the denial of Tibet and Taiwan as having always been independent nations (even when referring to Taiwan as its own country by accident), mentions of the Tiananmen Square massacre, the handing over of encryption keys from the cloud and smartphones to Chinese authorities, from intentionally removing Hong Kong comments and work, and laying off employees for supporting the Hong Kong protests.

This came to a head in the video game industry, after professionals Foyer Player Chung “blitzchung” Ng Wai said pro-Hong Kong protest statements in a post-game interview, Blizzard Entertainment suspended the player and both casters. Gamers and free speech advocates rallied against the company with protests.

Many believed this was because Blizzard wanted to stay in the Chinese market, if its popularity exploded, as many economic analysts claim. We looked at Blizzard’s financials ourselves and found that the company’s total profit in the Asia-Pacific region was less than 13%. Blizzard then issued two public apologies, stressing “our relations in China had no influence on our decision.

Some fear that Chinese companies and investments will continue to invest in the west – while demanding that they obey Chinese laws – essentially forcing the Western company to produce products for China and slowly turn away from it. Where is. Hanson’s theory of what Tencent does would fit this modus operandi, even if Tencent is developing games not designed for release in China.

Did Tencent jump out of the frying pan and into the fire? Will Nintendo’s brand resonate in China, despite not eliciting nostalgia and appeal for generations?

What do you think? Sound off in the comments below!

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