Tencent Holdings Ltd. – Chinese Video Gaming giant is shutting down the Penguin Esports streaming platform on 7th June 2022.
The company’s decision comes in less than a year after the Chinese government blocked the merger with Amazon’s Twitch. Though Twitch and Pengiun Esports hasn’t been popular, Tencent still owns the leading streaming platforms in China, Douyu and Huya, after acquiring them from TechCrunch.
Tencent said that the closure was due to a change in business strategies and assured that the users would be compensated accordingly. The company has already stopped new registrations on Penguin Esports and blocked in-app purchases. The platform will officially shut down on June 7th.
Over the past few years, there have been some challenges for the video gaming companies in China. The government and financial regulators have tightened scrutiny on the leading tech companies. This led to crackdowns on the top establishments, and the video game market suffered as a side effect.
As the controls got stringent and affected the playtime for minors, many platforms saw a decrease in the average playtime and revenues. Tencent showed only a one percent increase in revenue in the last quarter of 2021, while the playtime of minors fell by 88% in just a year.
Tencent controls over 70% of the game streaming market in China as per China’s market regulator. This would have increased to 90% if the merger with Twitch had gone through. The competition is high in the market as the streaming platforms don’t have enough new content to keep things going.
With Douyu and Huya enjoying the major share and the increasing popularity of Bilibili and Kuaishou, Penguin Esports doesn’t have much chance to make an impact anymore. Moreover, Tencent owns a stake in Bilibili and Kuaishou, though the platforms seem to be competitors.