Tencent’s Penguin Esports streaming service shut down after China blocks merger

Chinese tech giant Tencent will shut down its game streaming platform, less than a year after authorities blocked a merger that would have fueled its bid to take on Amazon’s Twitch.

Beijing has stepped up surveillance of big tech, launching a major crackdown on some of the biggest names in the industry, while the gaming market has also been hit due to tighter controls on play time for minors.

Tencent’s service Penguin Esports has halted new user registrations and in-app purchases, and will shut down all services on June 7, the company said in a statement Thursday.

The decision comes after China’s financial regulator blocked a merger of the country’s two largest video game live streaming sites due to antitrust concerns in July.

The planned merger of live streaming services Huya and Douyu could have taken the combined platforms’ domestic market share to 90% – and Penguin Esports was to be transferred under the combined entity.

The combination would also have granted Tencent majority control of the combined entity, with the transaction valued at around $6 billion (about Rs. 45,535 crore).

Tencent said its decision was “due to changes in business development strategy,” adding that it will compensate users with coupons in other games.

In the fourth quarter of 2021, Tencent’s domestic games revenue increased by 1%.

Total time spent by miners on games also fell 88% year-on-year, the company said.