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Tencent’s new blockbuster game rakes in US$270 mil in 30 days

Tan KW
Publish date: Mon, 24 Jun 2024, 09:39 PM
Tan KW
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 Tencent Holdings Ltd’s Dungeon & Fighter (DnF) Mobile more than doubled the sales of longstanding Chinese best-seller Honor of Kings in its first month, according to independent research, suggesting the online entertainment leader may have finally found a marquee franchise to replace ageing titles.

The Nexon Co-produced title brought in US$270 million on iOS in the 30 days after its launch on May 21, taking the top spot in both downloads and revenue in the country, data released by industry tracker Sensor Tower on Monday showed. The performance, which exceeded analyst expectations, marked the biggest debut of the year for Tencent and is widely seen as the best candidate to generate recurring revenue like Honor of Kings, long China’s most lucrative title.

Tencent hastened the release of DnF Mobile to May after positive feedback in testing, touting the game as a blockbuster that would rekindle growth in its key domestic games division. After Sensor Tower’s report on Monday, Niko Partners analyst Xiaofeng Zeng revised up his estimate for DnF Mobile’s 2024 gross revenue to between 15 billion yuan and 18 billion yuan. Even at roughly US$1 billion, DnF Mobile would contribute approximately 5% of Tencent’s domestic game sales this year.

The games publisher has aggressively marketed the action role-playing title. A-list Chinese actress Dilraba Dilmurat serves as brand ambassador for DnF Mobile, while players who invite their WeChat contacts to join can earn cash prizes. At one point, Tencent even inserted animated ads for the game into every WeChat conversation that included mentions of its title or even words like “warrior”.

Released internationally years earlier, DnF Mobile’s China launch was held up due to a pause in Beijing’s approval of new game releases, though the delay appears to have done little to dent its appeal in the world’s biggest games market.

The initial success of the title in China has spurred Tencent to begin rethinking traditional models. On Thursday, Tencent made a surprise move to pull DnF Mobile off Android app stores operated by Chinese smartphone makers including Huawei Technologies Co and Oppo, citing unspecified “adjustments” in their collaborations.

Tencent execs have long expressed frustration over the up-to-50% cut those app stores take from in-game purchases. With DnF Mobile, they decided to take a stand, people familiar with the matter said. Tencent decided to pull the app and let users download the game directly from its own sources, avoiding the commission by bypassing the middlemen, the people said, asking not to be named as the details are not public.

"Tencent’s DnF Mobile, an action-type mobile game, outranked long-reigning rival games in that category such as Honor of Kings and PUBG Mobile during the bulk of its first month since its May 21 launch, signs that the robust performance will persist for the rest of the year. This positions Tencent well to grow domestic games revenue slightly faster in 2024 vs 2023’s pace and sets Nexon up for a 19% annual growth in mobile-game game revenue from 2023-26," said Bloomberg Intelligence analyst Nathan Naidu.

Tencent has instead relied heavily on WeChat and fee-free third-party stores like TapTap to distribute DnF Mobile. Brokerages including Citi welcomed the move as positive for Tencent’s margins and its online entertainment business.

“DnF is the top-grossing game and it faces no pressure” from cutting ties with Chinese Android stores, Dash Huang, founder of TapTap operator XD Inc, wrote in a post on X last week.

Still, DnF Mobile will face rising competition this summer. Up-and-coming studio Mihoyo is slated to release its own action title Zenless Zone Zero on July 4. It features similar hack-and-slash combat, setting it in an anime theme that may appeal to a broader audience.

 


  - Bloomberg

 

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