Electronic Arts, Activision, Ubisoft, Microsoft, Sony, Nintendo. These are the most recognizable names in the video game industry, and some of its biggest companies. But what if I told you there was one that brought in more revenue than all of them? One that you’ve probably never even heard of?
That company would be Tencent, a Chinese holdings company which has a finger in so many gaming pies, it’s hard to keep track. They’re relatively unknown here in the west, but they’ve rose to prominence on the backs of some of the most popular PC games in the world.
Tencent operates with many of its services granted access to move beyond the Great Firewall of China, which allows it to compete for a billion plus Chinese customers where many other companies cannot. It’s the fifth largest internet company in the world behind only Google, Apple, Amazon and Facebook, though it’s revenues outstrip Facebook’s by $2B. And its gaming division has it on top of the revenue charts past EA, Activision, Microsoft and others, as we’ve already discussed.
Tencent has found great success with perhaps its most popular product, the QQ messenger. This has allowed them to invest heavily in a host of video games, including two of the most popular in the world.
The first of those would be League of Legends, the game normally thought of as being owned and operated by American company Riot Games out of Santa Monica.
And while that’s true, something that’s not often discussed is that Tencent owns a majority stake in Riot, which technically means League is Tencent’s game. Right now, League of Legends is the most popular game in the world with 27M daily active players and 67 million active monthly players, dwarfing its competition. Keep in mind that at its peak, World of Warcraft had about 15 million players, but League’s free-to-play model has allowed it to explode in popularity. It may not have the benefit of a subscription model the way World of Warcraft did, but it makes a substantial amount of revenue from microtransactions all the same.
Perhaps the more interesting Tencent game however is one that tops revenue and player charts worldwide, their first person shooter, Cross Fire.
In a scene filled with Call of Duty, Battlefield, Halo and Titanfall-type games, boasting rich gameplay and beautiful visuals, Cross Fire is the opposite in every possible way. If you just glanced at it offhand, you’d see a microtransaction-based version of Counterstrike 1.6, as the two look identical in almost every way, right down to ten year old visuals.
How can such a game be so popular?
There’s a reason that Cross Fire has been engineered to be such a low-quality game, at least visually. that allows it to run on any machine, no matter how crappy. In some Asian countries like South Korea and China, gamers often are limited to cheap laptops or gaming rigs that can’t handle the pressures of more graphically intense games. Cross Fire is designed to run well on literally anything, which is how it’s managed to attract a huge audience in Asia, and elsewhere in the world.
The game is supported on microtransactions which have proven very profitable for Tencent indeed. Again, these aren’t the only two games in their roster, but they’re two of the most popular not just for them, but for the entire world as well.
As a holdings company, Tencent gets to operate in the shadows, delegating the responsibility of running these games to companies like Riot. They provide the money while they have little say over the game. Their strategy has been to simply hire talent, and allow the game makers to create the best product they can with more or less unlimited resources. So far, it’s worked out very well for them, and they’re likely to be on top until the winds change, as tends to happen in the industry.
Which Tencent titles do you like to play? What about them have caught your interest?
[Photo via Riot Games]
