Tencent to shut down Steam-like mobile gaming portal as market outlook darkens under tight regulations

The mobile version of WeGame, the video game portal that was Tencent Holdings’ answer to Steam, will cease operations in two months, yet another sign that the business outlook in the world’s biggest gaming market has become bleaker under the Beijing’s scrutiny.

The WeGame app, as well as its embedded version on Tencent’s WeChat super app, will stop its service from September 8 due to “changes in business development strategy”, the company’s operating team said. application in a notice published on Tuesday.

WeGame stopped accepting new user registrations on Tuesday, and people will no longer be able to download the app from July 15, according to the notice.

Do you have questions about the biggest topics and trends around the world? Get the answers with SCMP Knowledge, our new curated content platform with explanations, FAQs, analysis and infographics presented by our award-winning team.

WeGame was once considered Tencent’s answer to Steam, the world’s largest online gaming portal. Photo: Shutterstock alt=WeGame was once seen as Tencent’s answer to Steam, the world’s largest online gaming portal. Photo: Shutterstock>

The decision comes a month after Tencent shut down its Twitch-like game streaming site Penguin Esports, as the world’s largest video game company by revenue, to streamline operations in a slowing market and increasingly competitive.

Tencent did not immediately respond to a request for comment Wednesday.

Launched in 2017 on mobile and PC as a rebranded version of Tencent Game Platform, the company’s original game distribution site, WeGame was originally designed as a gaming portal that hosts video games and other related content, with Steam – the world’s largest video game platform – being its main rival.

However, WeGame has largely failed to live up to its ambitions, now operating more often as a place where gamers can search for records of their scores and performance in games distributed by Tencent, such as League of Legends and its spin-off auto battle game Team flight tactics.

Some of the app’s functions will be transferred to the PC version of WeGame, which will remain operational, the team said.

The WeGame app has a “delicate positioning” in the market, said Zhang Yi, general manager of iiMedia Research.

“Tencent’s game products are owned by various studios, each backed by its own staff, budget, and development and operational resources,” which made WeGame “a bit redundant,” he said.

Regulatory pressure continues to weigh on Tencent and the Chinese video game industry, even after the government ended its eight-month freeze on video game licensing in April. The pace of approvals has slowed significantly from a year ago, while Tencent and its closest domestic rival, NetEase, have yet to secure a single new license this year.

Last year, Chinese antitrust regulators blocked Tencent’s plan to merge Douyu and Huya, two of China’s biggest game streaming websites, both of which are controlled by Tencent.

Also last year, Tencent experienced its slowest annual growth since the company went public in 2004. The Shenzhen-based company was in the process of shedding thousands of jobs, the Job reported in March.

Tencent has already recalled some of its non-gaming businesses, joining other Big Tech companies that have undergone restructuring to cut costs.

Last week, Vue Vlog, a live video blogging app purchased by Tencent in 2014, announced that it would cease operations in September. Tencent also said last month it would end its news aggregator app Kuai Bao, citing business adjustments.

“In the larger context of Tencent trying to cut costs and increase efficiency, products that don’t bring in money or strategic prospects should be cut,” said iiMedia’s Zhang. “It will not be surprising to see more Tencent products being shut down in the future.”

Some Chinese gamers said that WeGame’s demise was late.

“I’m not surprised at all about the closure,” said user Qiaoyiqiao, commenting in online video game community Xiaoheihe. “Many of Tencent’s high-traffic games have their own mobile terminals. Other small WeGame games do not attract players at all.”

“I kind of hope the PC version will stop as well,” said another user on Weibo.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice journal on China and Asia for over a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.