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Tencent shuts down Amazon rival Twitch after China blocks key merger


Tencent attempted to create a giant live streaming game by merging Huya and DouYu, two companies in which it has a large stake. But Chinese regulators terminated the deal in 2021. Months later, Tencent is shutting down its own live game streaming service. Penguin E-Sports.

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Tencent is shutting down its video game streaming platform months after Beijing halted a huge merger that would have made the Chinese internet giant a major player in the region.

The Penguin Esports service will shut down from June 7, Tencent said, citing a change in business strategy.

Like Amazon’s Twitch, Tencent’s Penguin Esports hosts live streams of professional gaming tournaments and other video game-related content. Tencent is one of the biggest online gaming players in the world and is aggressively pushing into professional gaming, also known as esports, 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 made Tencent one of the world’s biggest game streaming players.

In 2020, Tencent proposed to merge Huya and DouYu, two live game streaming companies in which it had substantial stakes. This 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.

Starting Thursday, Tencent announced that it will stop registering new users on Penguin Esports. On June 7, the app will be removed from app stores and its servers will stop working.

Tencent continues to invest in areas like esports, but regulators have also tightened gaming regulations in China to protect young users’ addiction, including reducing the amount of time children under 18 can play online. and freezing new title approvals.

That weighs on Tencent, which reported its slowest-ever quarterly revenue growth in the fourth quarter of last year.

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