Mobile gaming giant Tencent was onto a hit in its native China with a top grossing game, Honour of Kings, that had drawn 55 million players. But an extension into Europe and North America didn’t work out as planned, teaching the company some valuable lessons about expansions.
Renamed Arena of Valour for the new markets, into which it launched in the summer of 2017, the game was bringing in around $145 million every month from its 55 million daily active users in China. However, according to two sources that spoke to Reuters, several missteps in development and marketing as well as cross-border company disagreements between Chinese and US teams has led the company to more or less abandon the game in new markets.
“In those markets, we are really just letting it live or die on its own course,” one source told the news agency. They added that the game brings in just 100,000 users in Europe and 150,000 in North America. The original plans for the game’s growth overseas have now been abandoned, and its marketing team disbanded.
As a result of the failure, which has been painful in light of Tencent’s aim to grow its services outside of China, the company is adapting. It will need to: increased regulation from the Chinese government and a crackdown on addictive games have turned up the pressure to perform abroad.
Despite the massive growth potential of Chinese brands overseas, Tencent’s changes have been telling: first of all, it has begun paying attention to local needs, and has brought in partners with expertise in certain areas such as marketing, through the Singapore-based agency Sea Ltd.
Analysts have pointed to a dearth of expertise in key areas – distribution and user demographics – for the failure to compete in these markets.
First, there were infrastructure woes. Compared to China, much of Europe and North America’s gaming community doesn’t have access to fast 4G networks. As such, the most avid gamers prefer to play on their computers, which tend to have faster connections, needed for a rich online game.
In addition, Tencent has a natural advantage in promotion, given the prevalence of its WeChat and QQ platforms in China. Over in the West, it quickly became clear that Facebook didn’t occupy this position for PC gamers.
Other problems stemmed from weird assumptions. Honour of Kings, the original Chinese version, features characters inspired by the country’s vast mythology. In the overseas version, the company elected to take from European stories and comic-book heroes popular across the West. This created a problem in the increasingly important e-sports world: two versions of the same game limit the potential for international tournaments.
Renamed Arena of Valour for the new markets, into which it launched in the summer of 2017, the game was bringing in around $145 million every month from its 55 million daily active users in China. However, according to two sources that spoke to Reuters, several missteps in development and marketing as well as cross-border company disagreements between Chinese and US teams has led the company to more or less abandon the game in new markets.
“In those markets, we are really just letting it live or die on its own course,” one source told the news agency. They added that the game brings in just 100,000 users in Europe and 150,000 in North America. The original plans for the game’s growth overseas have now been abandoned, and its marketing team disbanded.
As a result of the failure, which has been painful in light of Tencent’s aim to grow its services outside of China, the company is adapting. It will need to: increased regulation from the Chinese government and a crackdown on addictive games have turned up the pressure to perform abroad.
Despite the massive growth potential of Chinese brands overseas, Tencent’s changes have been telling: first of all, it has begun paying attention to local needs, and has brought in partners with expertise in certain areas such as marketing, through the Singapore-based agency Sea Ltd.
Analysts have pointed to a dearth of expertise in key areas – distribution and user demographics – for the failure to compete in these markets.
First, there were infrastructure woes. Compared to China, much of Europe and North America’s gaming community doesn’t have access to fast 4G networks. As such, the most avid gamers prefer to play on their computers, which tend to have faster connections, needed for a rich online game.
In addition, Tencent has a natural advantage in promotion, given the prevalence of its WeChat and QQ platforms in China. Over in the West, it quickly became clear that Facebook didn’t occupy this position for PC gamers.
Other problems stemmed from weird assumptions. Honour of Kings, the original Chinese version, features characters inspired by the country’s vast mythology. In the overseas version, the company elected to take from European stories and comic-book heroes popular across the West. This created a problem in the increasingly important e-sports world: two versions of the same game limit the potential for international tournaments.
Sourced from Reuters, WARC
