Reuters, citing informed sources, reports a change in priorities within the gaming division of the Chinese IT giant Tencent amid falling revenue growth rates.
According to Reuters, since the end of 2023, Tencent has transferred hundreds of employees working on the mobile action game Assassin's Creed Codename: Jade to the development of the casual game DreamStar, a competitor to Eggy Party from NetEase, launched in December.
As a result of the redistribution of resources, Codename: Jade – a mobile Assassin's Creed about Ancient China – will be released not in 2024, but only in 2025. Three Reuters informants reported this at once.
Tencent came to the conclusion that the development of mobile games based on well-known Western franchises is expensive (including royalties of 15 to 20%) and brings low profits compared to the earnings of competitors on their own projects.
One of the Reuters informants reports that now, during negotiations with partners, Tencent will seek to reduce the royalty rate to 10% or less: “Several years ago this would have been unimaginable. Tencent was much more generous.”
“We will focus on fewer big-budget games. We generally look to bet on games that either belong to a successful IP or offer proven gameplay in a niche for the mass market,” said Tencent chief strategy officer James Mitchell.
Tencent founder Pony Ma recently said bluntly that the company's gaming division, which earned 180 billion yuan ($25 billion) in 2023 – about 30% of total revenue – should perform better.
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