Tencent attempted to create a gaming live streaming giant through the merger of Huya and DouYu, two companies it has a significant stake in. But regulators in China shut the deal down in 2021. Months later, Tencent is shutting down its own game live streaming service Penguin E-Sports.
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Tencent is shutting down its video game streaming platform months after Beijing shut down a huge merger that would have made the Chinese internet giant a major player in the area.
The service Penguin Esports will shut down from June 7, Tencent said, citing a change of business strategy.
Like Amazon’s Twitch, Tencent’s Penguin Esports hosts livestreams of professional gaming tournaments and other video game-related content. Tencent is one of the world’s largest online gaming players and is aggressively pushing into the area of professional gaming, also known as e-sports, for a potential new revenue stream.
The latest move is a blow to those ambitions and comes months after Chinese regulators blocked a key merger that would have turned Tencent into one of the world’s largest game streaming players.
In 2020, Tencent proposed merging Huya and DouYu, two live game streaming companies that it had substantial stakes in. That would have valued the new company at around $6 billion at the time and Tencent planned to move its Penguin Esports brand under the combined entity.
But last year, Chinese regulators blocked the deal over antitrust concerns.
From Thursday, Tencent said it would stop new user registration on Penguin Esports. On June 7, the app will be removed from app stores and its servers will stop operating.
Tencent continues to invest in areas like e-sports but regulators have also tightened gaming regulations in China to protect addiction among younger users, including cutting down the amount of time kids under 18 can play online and and freezing approvals of new titles.
That is weighing on Tencent, which reported its slowest quarterly revenue growth on record in the fourth quarter of last year.