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Tag: Tencent

  • China’s Regulators Block New Video Games

    China’s Regulators Block New Video Games

    China is taking more steps to combat video game addiction, blocking new games from being licensed in the country.

    China is on a crusade to combat video game addiction in children. The country recently restricted minors to only three hours of gaming per week — an hour a day on Friday, Saturday and Sunday, as well as on holidays.

    Regulators are now taking an additional step, putting new game approvals on hold “for a while,” according to sources that spoke with the South China Morning Post. The goal is to “cut the number of new games” and “reduce gaming addiction.”

    The decision is sure to impact some of China’s most successful companies, including Tencent and NetEase, companies that have made billions from the very type of games China now seeks to curtail.

  • Tencent and NetEase Stocks Take a Hit After China’s Gaming Ban

    Tencent and NetEase Stocks Take a Hit After China’s Gaming Ban

    Tencent and NetEase have both taken a hit to their stock price following China’s decision to limit how much time minors can spend gaming.

    China made headlines when its National Press and Publication Administration (NAAP) limited minors to only three hours of video gaming a week. Kids will only be able to play one hour a day, Friday through Sunday, as well as during holidays.

    According to CNBC, Tencent and NetEase, the country’s two largest gaming companies, have both seen their stock fall roughly 3% in the aftermath of the the NAAP’s decision. Despite the hit, analysts don’t believe there will be major impact long-term.

    “We estimate about 5% of gaming revenue comes from minors under 18 years old, and we believe there is about 3% earnings impact to Tencent if we assume gaming contributes about 60% of total earnings,” investment bank Jefferies said in a note, seen by CNBC.

    “Minors represent low singe digits of NetEase’s gaming revenue,” the analysts continued.

  • TSMC Is Now Asia’s Most Valuable Company, Leapfrogging Tencent

    TSMC Is Now Asia’s Most Valuable Company, Leapfrogging Tencent

    TSMC has passed Tencent to become Asia’s most valuable company, a testament to TSMC’s ascendance and Tencent’s troubles at home.

    Taiwan’s TSMC has become the leader in the semiconductor industry, manufacturing chips for everyone from Apple to Intel. The company is widely considered to have a healthy lead technologically, making it that much harder for its competitors to challenge its position in the market.

    In the meantime, Tencent has been facing challenges in its home country of China. The company is behind a number of popular mobile games, such as PUBG Mobile and COD Mobile, but China has been critical of the impact of video games on young people. Being under the government’s scrutiny has been enough to blunt Tencent’s value, creating further opportunity for TSMC to pass it.

    According to CNBC, TSMC is now worth $538 billion, as opposed to Tencent, which is worth $536 billion.

  • Cloud Infrastructure Spending Hit $42 Billion in Q2

    Cloud Infrastructure Spending Hit $42 Billion in Q2

    The cloud infrastructure market continued its impressive gains, with spending hitting $42 billion in Q2, according to Synergy Research Group.

    Synergy’s latest data is good news for the industry, and provides a number of important revelations. According to the company, the top three cloud companies continue to be AWS, Microsoft and Google, with 33%, 20% and 10% of the market respectively. Alibaba, IBM, Salesforce, Tencent, Oracle and “Others” round out the industry.

    Interestingly, that means the top three companies account for 63% of money spent on cloud infrastructure.

    “This market continues to be a runaway success story for Amazon, Microsoft, Google and some other cloud providers. You would not normally expect to see growth rates actually increasing in such a huge and rapidly developing market, yet once again that is what our research has shown,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “It must be said that this success is hard earned. Amazon, Microsoft and Google in aggregate are typically investing over $25 billion in capex per quarter, much of which is going towards building and equipping their fleet of over 340 hyperscale data centers. There remains a wealth of opportunity for smaller, more focused cloud providers, but it can be hard to look away from the eye-popping numbers coming out of the big three.”

    Synergy’s report is further evidence that, despite the accelerated cloud transition as a result of the pandemic, there appears to be plenty of room for further growth.

  • Prosus Buying Stack Overflow for $1.8 Billion

    Prosus Buying Stack Overflow for $1.8 Billion

    Prosus has announced it is buying Stack Overflow for $1.8 billion, as it increases its focus on the online learning market.

    Prosus is a consumer internet group that has investments in the online classifieds, education technology, food delivery and payments and fintech markets. The company is the largest shareholder of Tencent Holdings, the Chinese company behind some of the biggest games, including Fortnite, PlayerUnknown’s Battlegrounds, Call of Duty: Mobile and Ring of Elysium.

    Prosus appears to be making a major move in the online education market with the acquisition of Stack Overflow. Stack Overflow is one of the top 50 websites in the world, with an extremely active user base. In fact, 85% of the site’s community visits every week to access the 52+ million questions and answers, most about programming and development.

    “We are delighted to be welcoming Stack Overflow to the Prosus family as we increasingly focus on the future of workplace learning,” Larry Illg, CEO of EdTech at Prosus, said. “Learning of any kind typically begins with a question and their platform is critically important for global developers when they have questions about their work. There is an opportunity to connect more deeply with their community through our other education platforms to further fulfill their learning needs.

    “With enduring skills shortages and ever-evolving needs within technology organizations, technology training has emerged as the largest and fastest growing segment of corporate learning and development,” Illg continued. “As an operator of businesses across 90+ countries, we understand the needs of technologists and developers, particularly in high-growth markets. In addition to further scaling its community in the markets we know well, we want to help Stack Overflow Teams to expand within enterprises to address an underserved opportunity to transform their technology learning and collaboration.”

    “We are excited to be joining the Prosus family, which catapults us into a new phase of growth and allows us to expand and accelerate Stack Overflow’s impact around the world,” Stack Overflow’s CEO, Prashanth Chandrasekar, said. “Prosus’s expertise growing and nurturing communities, especially in a global context, will make our public platform even more invaluable in helping developers and technologists learn and grow. Given Prosus’s focus on the future of the workplace, their partnership will allow our market leading SaaS collaboration product, Stack Overflow for Teams, to reach thousands more global enterprises, allowing them to accelerate product innovation and increase productivity by unlocking institutional knowledge.”

    The deal is expected to close in Q3 2021.

  • Huawei Shifting Focus to the Cloud

    Huawei Shifting Focus to the Cloud

    As US-led sanctions take a toll, Huawei is increasingly shifting its focus to the cloud to help secure its future.

    Huawei is one of the main network equipment providers worldwide, competing with Nokia and Ericsson. In addition, it is one of the top smartphone makers. Despite its success, it has been under increasing pressure from the US over security concerns.

    While all Chinese companies must comply with the Chinese government, Huawei is largely seen as having unusually strong ties to the Chinese intelligence and military community. As a result, US officials have been adamant in their accusations that Huawei represents a threat to the national security of any country allowing the company’s equipment on their networks. This has led the US, Australia, New Zealand and the UK to institute bans of the beleaguered company.

    The US has also modified its Entity List and Foreign Direct Product Rule to exclude Huawei from accessing products based on US technology, even if those products are manufactured by non-US companies. This effectively cut Huawei off from TSMC, one of its biggest chip suppliers, causing Huawei to admit it will likely have to stop making its own chips as a result.

    According to the Financial Times, Huawei is now shifting its focus to its cloud business in an effort to stabilize and ensure its future survival. Recognizing the growing importance of its cloud unit, Huawei elevated it to equal footing with its telecoms and smartphones units back in January. The company still has much ground to cover before it catches up with rivals Tencent and Alibaba, but FT reports the Chinese government is planning to give Huawei more public cloud contracts to help it stabilize.

  • New Funding Round Values Reddit at an Astounding $3 Billion

    New Funding Round Values Reddit at an Astounding $3 Billion

    Reddit announced a new $300 funding round valuing the company at an astounding $3 billion. The valuation is amazing considering that Reddit has been around for quite a while and is presumably past its high growth phase. Reddit was founded in 2005, a year after Facebook and a year before Twitter.

    Half of that investment is coming from China video game producer Tencent, raising concerns from some about censorship possibilities. Reddit is currently banned in China.

    Steve Huffman, CEO of Reddit, discusses the new funding round in an interview on CNBC:

    We are reinventing the ads business both on the technology side and our ability to sell it and to create a friendly home for users and brands alike. We’ve made steady progress on all of these fronts over the last year. We feel pretty proud of where we are. As a result, we’re seeing a lot of attention from both brands and investors.

    When we’re talking about competing for ad dollars, of course, we’re talking about Facebook and Google who take up the vast majority of ad spend. But when we think about our competitors, I half-jokingly but truthfully say, we’re competing with anywhere people spend their free time.

    They (Tencent) are investing in lots of videogame companies and video games are one of many categories that are really popular on Reddit. But the fact of the matter is we are the only company at our scale that’s still a private company. We’ve had a lot of investor intention in the last year. So we find ourselves in a good position to kind of get something done right now.


  • China Just Lifted New Video Game Ban

    China Just Lifted New Video Game Ban

    China just lifted its year-old ban on new video games but no Tencent games were approved in the initial list. Gamer World News Entertainment host Capt. Rob Steinberg says that it’s not really much of a surprise that Tencent’s Fortnite wasn’t in this first 80. He sees it as a huge economic opportunity for gaming companies in general.

    Steinberg also noted that China “has gone very hyper” with the control they have put on games.

    Capt. Rob Steinberg, host at Gamer World News Entertainment, discussed the lifting of the new game ban by China on Fox Business:

    China Just Lifted New Video Game Ban

    From what I’ve seen China just lifted this ban that allows more games to be licensed in China. That being said, we’ve only released about 80 games that were there. In that there are about 3,000 games that will be released in 2019 and there are about 7,000 games that are on this waitlist.

    It’s not really much of a surprise that Tencent’s Fortnite wasn’t in this first 80. But what this does say is that there is an enormous market, a market that takes up $34 billion in the gaming industry that has now opened up the possibility of having these games enter that market.

    China Has Gone Very Hyper Controlling Games

    The gaming ban is really put in place by the government to try and protect its people. They’re very strict whenever it comes to allowing things in that might show anything that is illegal, immoral, or violent.

    That being said, they have gone very hyper as far as the amount of control that they put over these games. In doing that they’ve lowered their economic ecosystem in gaming by 5.4 percent as of last year.

    A Fantastic Time to Invest in Gaming

    It has definitely had a huge impact and I believe lifting the console ban and allowing more games to come in will help them create more money. It also is great for us here in case you haven’t already invested in Tencent this is a fantastic time for you to consider getting into the game knowing that they are now about to open up to a huge market if they can break through and if Fortnite becomes popular with the Chinese.


  • Chinese Telco Invests in Epic Games

    Chinese Telco Invests in Epic Games

    Tencent Holdings Limited, a Chinese internet, mobile, and telecommunications provider, announced today that it has acquired a minority stake in Epic Games, Inc. Epic is the development studio behind the Unreal Engine and video game titles such as the Gears of War series. Tencent classifies the investment as a strategic one, and states that Epic will continue to operate independently. The amount of the investment was not disclosed.

    “We’ve developed a huge amount of respect for the Epic team for many years now, as dedicated players of Epic’s games and as licensees of Epic’s Unreal Engine technology,” said David Wallerstein, senior executive vice president of Tencent. “Epic’s deep commitment to quality across all of its games and technologies inspires us. They’ve been raising expectations in gaming for two decades now and they’re just getting started. We have a lot that we can learn from each other, and we look forward to supporting the Epic team as they embark on their next phase of gaming innovation across both emerging and familiar platforms.”

    Epic had two major announcements at this year’s E3. The company is helping to develop Gears of War: Judgment, a prequel to the original Gears of War game. Epic also showed off its new Unreal Engine 4 at the trade show. The updated engine features better lighting, reflection, and particle effects, as well as a modable editor interface that allows developers to compile code on-the-fly.

    “Tencent’s investment will empower Epic to help us do even more of what we do best, which is making great games and game technology,” said Epic president Michael Capps. Their expertise in the global online gaming market is second-to-none, and the opportunity to work with them to bring richer experiences to players all over the world is irresistible. Epic is excited to be full steam ahead on all of its current plans for this generation of games and the next, with the support of a fantastic partner that believes in our strategy and shares our dream.”